FERC has approved a settlement between Luminant Generation and the Texas Reliability Entity for violations of a regional reliability standard governing primary frequency response in the ERCOT region (NP26-2).
NERC submitted the settlement Nov. 26 in its monthly spreadsheet Notice of Penalty (SNOP); FERC said in a Dec. 23 filing that it would not further review the agreement. The settlement carries no monetary penalty.
Luminant’s settlement concerned violations of BAL-001-TRE-2 (Primary frequency response in the ERCOT region), a regional standard approved by NERC’s Board of Trustees in 2020 and approved by FERC the same year. (See “Standards Actions,” NERC Board of Trustees Briefs: Feb. 6, 2020.) Requirement R9 of the standard specifies the 12-month minimum rolling average value of each generating unit’s initial primary frequency response (PFR) performance, while requirement R10 sets the minimum sustained PFR.
The utility self-reported both violations, the first on Aug. 18, 2022. On that date, Luminant notified Texas RE that it had not set the required initial PFR at four generating units: Unit 1 at the Lake Hubbard gas plant, Unit 1 at the Odessa-Ector combined cycle plant, Unit 2 at the Oak Grove coal plant and the Castle Gap solar plant.
Lake Hubbard was the first to fall below the required value on Aug. 31, 2021. That unit and the Odessa-Ector unit have since been reset and returned to compliance; the other two were still noncompliant at the time the SNOP was filed, although mitigation efforts — including reviews of the plant controller logic and updates to turbine control and distributed control systems for Oak Grove and correcting high sustainable limit telemetry for Castle Gap — were ongoing. The SNOP did not provide an estimated date of completion for the mitigation.
Luminant reported its noncompliance with requirement R10 to Texas RE on June 30, 2023, notifying the regional entity that the average sustained PFR at Lake Hubbard 1, Oak Grove 1 and 2, and Castle Gap had fallen below the required value. Only Lake Hubbard had returned to compliance at the time of the SNOP. Similar mitigation measures to those for the R9 infringements were underway at the affected plants.
Texas RE assessed the root cause of both violations as ineffective detective controls — specifically a failure to “identify and correct issues with [Luminant’s] controller frequency response logic and other settings that affect PFR performance.” The RE wrote that the violation posed a minimal risk, observing that “the overall market frequency response in the Texas Interconnection is robust enough to ensure sufficient frequency response [was] available to respond to” frequency events despite the incorrect PFR settings.
Texas RE acknowledged the duration of the infringement, with some units having the wrong PFR value for several years, but wrote in the utility’s defense that the problem might not have been detected because detection requires frequency events that were rare in the area. For example, the RE observed that the last score recorded for Oak Grove 2 was in April 2023, and Castle Gap’s last recorded score was in June 2024. Texas RE also considered Luminant’s “robust” internal compliance program to be a mitigating factor in the penalty determination.
Finally, Texas RE acknowledged that Luminant has experienced prior noncompliance issues with the same requirements, but it determined that these incidents “should not aggravate the penalty” for two reasons. First, those violations were disposed of as compliance exceptions, which are not meant to be used as aggravating factors for a later violation unless it is considered a serious or substantial risk. Second, Texas RE determined that the mitigations for the previous violations would not have prevented the most recent issues because they affected different settings.
Commissioners also approved a separate SNOP concerning violations of NERC’s Critical Infrastructure Protection standards. Details of that SNOP were not made public in keeping with the commission and NERC’s policy against sharing critical energy/electric infrastructure information.
