PUCT Issues Notice of Violation Against Energy Curtailment Specialists Concerning EILS Obligations

The PUCT executive director has issued a Notice of Violation (NOV) against Energy Curtailment Specialists, Inc. seeking an administrative penalty of $50,000 as Oversight and Enforcement Staff alleged that ECS failed to meet its Emergency Interruptible Load Service (EILS) obligation on February 2, 2011 (Docket 40127).

The NOV is not a final decision, and ECS has the right to request a contested case hearing on the alleged violations and the amount of the penalty

Oversight and Enforcement (O&E) Staff specifically alleged that ECS's Event Performance Factor, calculated by ERCOT in accordance with Protocol § 8.1.3.1(6), was 11% for the February 2 event, failing to meet the Protocol's required 95% threshold.

O&E Staff also alleged that ECS failed to deploy its EILS loads within ten minutes as required. ERCOT issued a Verbal Dispatch Instruction requesting EILS deployment at 05:46 on February 2, 2011, and O&E Staff alleged that data provided by ERCOT shows that ECS met its load reduction for the first time in the interval ending at 07:15, more than one hour after the ERCOT instruction was given.

O&E Staff alleged that failure to adhere to ERCOT procedures also amounted to a violation of Subst. R. 25.503(f)(2)

"ECS's failure to deploy the EILS as it had agreed to provide, as directed by ERCOT during an emergency event, is a violation with potentially serious implications for the reliability of the electric grid," O&E Staff alleged.

O&E further alleged that, "ECS advertises several features of its program that directly undermine the effectiveness and purpose of EILS, including statements that participating loads will bear no costs or penalties for failing to perform when called upon. By failing to incentivize load participants to perform, ECS is hampering ERCOT's ability to rely on EILS as an emergency response tool. This aspect of the Demand Response program has the potential for extensive economic harm and other disruptions, especially in response to an emergency event."

While O&E Staff reported that ECS has begun legal review of contract termination for three of the four sites that were obligated to perform in the February to May 2011 EILS Contract Period, "O&E believes than an administrative penalty of $50,000 is necessary in order to deter future violations by ECS."