Texas regulators will begin the new year with a discussion of pricing issues within ERCOT following complaints from participants saying they were improperly charged for point-to-point (PTP) obligations in the day-ahead market (DAM).

The Public Utility Commission agreed during its open meeting Dec. 17 to pick up the conversation during one of its two meetings in January.

“I’m not saying I’m opposed to repricing, but I’d like to hear reasons we do it in some cases and a defense of it,” Commissioner Arthur D’Andrea said. “I worry about the day when we’re talking about really big numbers.”

DC Energy Texas and Monterey TX, both qualified scheduling entities (QSEs), complained that their PTP obligations in the DAM were improperly priced in excess of their not-to-exceed bid prices following a market software error in September 2019. ERCOT’s board approved price corrections for eight operating days affected by the error, along with 13 others. (See Directors Approve Price Corrections for 21 Operating Days,” ERCOT Board of Directors Briefs: Dec. 10, 2019.)

The QSEs said the resettled prices left them $269,283.22 and $86,647.98, respectively, out of pocket, and took their complaints through ERCOT’s alternative dispute resolution process. The ISO determined in April that it had not violated any protocols in handling the resettlements and denied their requests.

The companies then filed complaints with the PUC in May. An administrative law judge in October found ERCOT had violated protocols when it issued the resettlement statements and said the QSEs were entitled to “a remedy that places them back in the position they would have been in had they never been awarded PTP obligations at prices more than $0.01/MWh above their not-to-exceed bid prices” (50871).

“I have a lot of sympathy with what the [judge’s decision] says,” D’Andrea said. “These [P2P obligations] are hedging instruments. Putting a price not to exceed is part of risk management, but to blow those up doesn’t feel right to me.”

D’Andrea said ERCOT runs an “incredibly complicated system” but added that “the protocols read like an owner’s manual for the atomic bomb.”

“One thing I’m convinced on, like previous cases, is that the Protocols could be clearer,” PUC Chair DeAnn Walker said, suggesting a rulemaking could be in order. “If everyone says this is an issue, but everyone says we can’t agree on what the solution is … that’s what we’re here for.”

In October, ERCOT’s Board of Directors approved two more sets of price corrections covering 25 operating days. Unaffiliated director Peter Cramton called for a strong policy on price corrections, while staff has responded by creating a monitoring group to review system design changes before they go live. (See “Board Approves 2 Sets of Price Corrections,” ERCOT Board of Directors Briefs: Oct. 13, 2020.)

PUC Rejects Rulemaking Petition

The PUC rejected energy storage developer Broad Reach Power’s petition for a rulemaking to clarify commission rules on how a transmission service provider’s (TSP) transmission tariff applies to wholesale storage entities. Staff said its rule is “clear and unambiguous” in that a TSP’s “tariff shall not apply to any entity engaging in wholesale storage” (51501).

Broad Reach filed the petition in November after Texas-New Mexico Power (TNMP) filed wholesale tariff revisions for transmission service that the energy storage developer said assessed distribution service charges to wholesale storage entities. Broad Reach said the changes were “inconsistent” with commission rules and applicable legal standards. (See “Commission Threatens TNMP with ‘Comprehensive’ Rate Case,” Texas PUC Briefs: Nov. 19, 2020.)

Gleeson Named Executive Director

The commissioners approved COO Thomas Gleeson as their new executive director. He replaces John Paul Urban, whose resignation was announced Dec. 9.

Gleeson joined the PUC in 2008. He previously was a legislative analyst for the Texas Senate and a budget analyst for the Legislative Budget Board.

Legislative Report Finalized

The PUC approved its biennial report to Texas lawmakers, who will begin their 87th legislative session on Jan. 12. The report includes a recommendation that the Legislature clarify that electric vehicle charging stations are not an electric utility or a retail electric provider and that use of such stations is not a transaction governed by existing retail electric policies.

“These changes will provide regulatory rightsizing and consistency across the state, in areas inside and outside competition, to facilitate deployment and competition of electric vehicle charging stations for customers,” the report says in edits offered by D’Andrea.

$307,500 in Administrative Penalties

The PUC hit three companies with a total of $307,500 in administrative penalties. The commission:

• docked retailers Direct Energy, First Choice Power and Bounce Energy $250,000 for various infractions that involved enrolling customers in postpaid service plans without obtaining written and signed letters of authorization; distributing inaccurate lists of authorized pay stations and improper customer disconnections. Direct Energy and First Choice Power are affiliates within the same brand family, which purchased Bounce Energy and acquired its customers following the violations (51277).
• agreed with TNMP on a $50,000 penalty for violating staff’s system average interruption duration index (SAIDI) standard of 54.77700 minutes (5% over the threshold) for the 2019 reporting year (51395).
• assessed Twin Eagle Resource Management, a QSE, $7,500 for incorrectly opting out of a reliability unit commitment instruction (51154).

The PUC also approved rate case filing deadline extensions for Cross Texas Transmission (51534) and Electric Transmission Texas (51583).