Texas Draft Order Would Fine QSE $25,000, As Sought by Staff

A proposed order from a Texas ALJ would impose a $25,000 administrative penalty on CPS Energy, an authorized qualified scheduling entity (QSE), relating to failure to meet non-spinning reserve service (NSRS) deployment requirements.

According to the draft order, on February 1, 2011, CPS submitted a COP to ERCOT that informed ERCOT that CPS planned to provide 96 MW of NSRS using Braunig CT5 and Braunig CT8. "It is uncontested that Braunig CT5 failed to start and come online within 30 minutes when NSRS was deployed on February 2, 2011, as required by Protocol 6.5.7.6.2.3(4)," the ALJ noted.

CPS claimed it was not required to comply with ERCOT's dispatch instruction on February 2, 2011, because the instruction was invalid under Protocol § 6.5.3(1) and, in CPS's sole judgment, it created a risk to safety and equipment under Protocol § 6.5.7.9(1).

The ALJ disagreed.

"If ERCOT Protocol § 6.5.3(1) were read as urged by CPS, it could eviscerate the ERCOT Protocols. Market participants would be able to claim -- essentially after-the-fact -- that any type of malfunction that disables equipment is a limitation they have temporarily placed on the equipment and, therefore, a dispatch instruction is invalidated," the ALJ said.

Additionally, with respect to CPS' argument regarding risk to safety and equipment under Protocol § 6.5.7.9(1), the ALJ said that, "CPS needed to plainly state that a situation existed in which compliance with the dispatch instruction would create an undue threat to safety, undue risk of bodily harm, or undue damage to equipment." However, while CPS informed ERCOT of "low temperature pressures," the ALJ agreed with Staff that this statement was not sufficient to communicate an undue threat to safety or damage to equipment.

Additionally, the ALJ concluded that, "CPS failed to prove that the failure to comply with ERCOT Protocols was beyond its reasonable control."

The ALJ would conclude that CPS violated ERCOT Protocol §§ 6.5.7.6.2.3(4) and 8.1.1.4.3(3)(b), which also implicate violations of PURA § 39.151(j) and P.U.C. Subst. R. 25.503(f)(2).

The ALJ agreed that the $25,000 fine sought by Staff is appropriate.

Docket 40487