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Texas QSE To Pay $500,000 Under Settlement Related To Alleged Instance Of Inaccurate Telemetry That Contributed To May 2019 ERCOT Price Spike

Inaccurate Telemetry Had Prompted Broader Discussion On Market Outcomes, Pricing, Reliance On QSEs' Inputs


December 30, 2021

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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Staff of the Public Utility Commission of Texas ("Staff") and Calpine Power Management LLC ("QCALP") (together, "Parties") have entered into a Settlement Agreement to resolve and conclude Commission Staff's investigation of QCALP for alleged violations of the Public Utility Regulatory Act § 39.151(j) ("PURA") and 16 Texas Administrative Code (TAC) § 25.503(f)(2), concerning an alleged failure to adhere to Electric Reliability Council of Texas (ERCOT) Protocols §§ 6.4.6, related to Resource Status and 6.5.7.9, related to Compliance with Dispatch Instructions and Accurate Telemetry.

Under the settlement, Commission Staff recommends, and QCALP agrees to pay, an administrative penalty of $500,000 for final settlement of the alleged violations described in a proposed order.

The settlement states, "This Agreement represents a compromise of disputed claims and allegations, and the execution of this Agreement does not admit the truth or accuracy of any such disputed claims or allegations."

See background on the May 2019 pricing event here. The event prompted petitions to re-price the market and led to broader discussion of market outcomes and reliance on QSE inputs

ERCOT Nodal Protocols § 6.4.6 requires QSEs to provide accurate telemetry of the current capability of each generation resource including resource status, ramp rates, high sustained limit (HSL) and low sustained limit (LSL).

The settlement states, "On May 30, 2019, an IT employee conducted a software update, which was performed outside of QCALP's applicable authorization policies and procedures. This update inadvertently resulted in the submission of inaccurate HSL and LSL values to ERCOT. The update also resulted in improper flagging of QCALP's ramp rate telemetry for a period of two seconds for each of 15 units in its fleet. Commission Staff asserts that these actions are violations of PURA, Commission rules, and ERCOT Nodal Protocols."

The settlement states, "The inadvertent but inaccurate telemetry resulted in an increase in system-wide frequency, which required ERCOT to re-run its security-constrained economic dispatch to generate new system-generated basepoints for QCALP's resources. These new basepoints required QCALP's resources to begin ramping down."

The settlement states, "ERCOT Nodal Protocols § 6.5.7.9(1) requires QSEs to comply fully and promptly with dispatch instructions to ramp down any units in its fleet. Due to the operational status of several individual generating units, some of which were in local control or had power augmentation capabilities in service, QCALP's resources could not automatically ramp down to the basepoints generated as a result of the telemetry error, which was unknown to QCALP at the time. Additionally, within the two-minute window during which QCALP received basepoints to ramp down its resources, QCALP personnel had not had time to start contacting resources to follow those basepoints when ERCOT personnel initiated a new SCED run that required QCALP's resources to continue operating at their current levels."

The settlement states, "ERCOT Nodal Protocols § 6.5.7.9 requires QSEs to notify ERCOT immediately and provide the reason for non-compliance if the QSE is unable to comply with dispatch instructions. Though ERCOT contacted QCALP two minutes after receipt of the inaccurate telemetry and dispatch of new basepoints, QCALP was unaware of the software update and the resulting telemetry issue, and therefore was unable to immediately notify ERCOT of the inaccurate telemetry or provide explanation for the discrepancy between the new ERCOT system-generated basepoints and the actual operating status of the resources. However, QCALP informed ERCOT it would investigate the issue. When QCALP confirmed the cause of the error four days after the event, it notified ERCOT."

The settlement notes that Calpine has taken steps to improve its processes and prevent a similar telemetry error from occurring in the future, with various such actions described in the settlement

Docket 53020

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