Texas PUC Fines Curtailment Service Provider $50,000

The Public Utility Commission of Texas adopted an order penalizing Energy Curtailment Specialists, Inc. $50,000 because, as a Qualified Scheduling Entity providing Emergency Interruptible Load Service (EILS), its portfolio of loads failed to curtail to a level at or below its maximum baseload within ten minutes of instruction from ERCOT during the February 2, 2011 emergency event.

According to a finding of fact contained in a proposal for decision adopted by the Commission, with the exception of the final Commission action increasing the fine recommended by the proposal for decision, "ERCOT's data analysis demonstrates that by 6:00 a.m. ECS's Loads had only reduced their consumption to 2.466 MW." According to PUCT Staff testimony, ECS's load portfolio was supposed to consume no more than 0.200 MW at this time.

A finding of fact in the proposal for decision also stated, "ECS did not reach an Event Performance Factor (EPF) of 95% or more, as required by ERCOT Protocol § 8.1.3.1(6)(f), because its Loads did not remain curtailed to a level at or below their maximum baseload until released by ERCOT." According to the proposed order, ECS's EPF, calculated by ERCOT in accordance with ERCOT Protocol § 8.1.3.1(6), was 11%.

A proposal for decision had originally recommended a $25,000 penalty, "because ECS does not have any previous violations; there was no harm that resulted from the violations; ECS now emphasizes to its Loads that they must curtail when called upon; ECS notified its Loads to curtail; an amount of $25,000 is a sufficient to deter future violations [sic]; and the two violations resulted from the same emergency event."

However, the Commission yesterday voted to increase the fine to $50,000, citing the importance of EILS performance during grid events.

ECS provided the following statement to Matters:

"ECS takes its responsibilities to the Texas market and all markets within which it operates, seriously as evidenced by its 10 years of successful performance in NY, PJM and other markets. ECS argued that the assessment of the maximum penalty was excessive: 1) in relation to the magnitude of the violation; 2) in light of the fact that this was our first violation and 3) as there was no intentional misbehavior on our part. After a close review of the facts, the ALJ agreed with us and lowered the fine to $25,000. The commission concurred with the ALJ analysis but stated that they needed to 'send a strong message' to DR in their decision to raise the penalty to $50,000."

Conclusions of law in the proposal for decision specifically found:

"ECS violated ERCOT Protocol § 8.1.3.1(6)(a) because its portfolio of loads failed to curtail to a level at or below its maximum baseload within ten minutes of instruction from ERCOT during the February 2, 2011 emergency event."

"ECS violated ERCOT Protocol § 8.1.3.1(6)(f) because its portfolio of loads failed to achieve an EPF of 95% or greater by remaining curtailed at a level at or below its declared maximum baseload until released by ERCOT during the February 2, 2011 emergency event."

Docket: 40127