16 TAC §25.503
The Public Utility Commission of Texas (commission) proposes
new §25.503, relating to Oversight of Wholesale Market Participants.
The proposed new rule is necessary to protect the public interest by facilitating
the effective and efficient operation of electricity markets and the reliable
delivery of electricity during the transition to and the establishment of
a fully competitive electric power industry in Texas. Project Number 26201
is assigned to this proceeding.
The proposed new rule, if adopted, will establish: (1) the standards that
the commission will use in monitoring the activities of entities participating
in the wholesale electric market in Texas and enforcing the statutory provisions,
rule requirements, market Protocols, and operating guidelines applicable in
that market; (2) the standards and criteria for enforcement of market Protocols
adopted by the Electric Reliability Council of Texas (ERCOT); and (3) the
ethical standards that will apply to market participants and define the duties
and prohibitions applicable to market participants. In addition, the proposed
new rule will require market participants to maintain certain records to demonstrate
their compliance with the rule, create a procedure for obtaining official
interpretations and clarifications of ERCOT Protocols, identify the role of
ERCOT in enforcement actions, and describe an informal fact-finding review
procedure that may be used by commission staff in reviewing compliance with
the rule.
Patrick J. Sullivan, Attorney, Legal and Enforcement Division, has determined
that for each year of the first five-year period the proposed section is in
effect there will be no fiscal implications for state or local government
as a result of enforcing or administering the section.
Patrick J. Sullivan, Legal and Enforcement Division, has determined that
for each year of the first five years the proposed section is in effect the
public benefit anticipated as a result of enforcing the section will be facilitating
the effective and efficient operation of electricity markets and the reliable
delivery of electricity during the transition to a fully competitive electric
power industry in Texas. The Texas Legislature has determined that Texas should
change from a system in which electric power is fully regulated by the commission
to a system in which competitive forces will determine the rates, operations,
and services that are available to the public. The Legislature has directed
that the commission implement these changes in a manner that provides customers
safe, reliable, and reasonably priced electricity. Recent experience in other
states has shown that during the transition to competition, the developing
wholesale and retail markets can be subject to practices by market participants
that serve the private interests of the participants at the expense of the
public interest. These practices have resulted in unjustified increased prices
to customers and market participants, reduced reliability of the electric
power grid, and ultimately threaten the implementation of a successful competitive
electric market. As an example, in California, market manipulation by market
participants contributed to elevated retail prices that were estimated to
be $3 billion to $11 billion higher than would have occurred in a properly
functioning market. These high prices also contributed to higher prices for
long-term contracts for wholesale electric power. The impact on the California
economy was enormous, including the bankruptcy of a major electric utility
and many days of rolling blackouts that further crippled the economy and threatened
the public health and safety. To protect the public interest from these possible
effects, the commission finds that it is important that the obligations and
restrictions applicable to market participants be specified. The purpose of
this proposed rule is to establish those standards. The public benefits anticipated
as a result of this rule include the protection of customers and market participants
from unfair, misleading and deceptive practices; the availability of reliable
transmission and ancillary services at reasonable prices to all market participants;
clarification of the obligations and restrictions applicable to market participants
to reduce uncertainty in the wholesale markets; clarification of the commission's
procedures and standards for overseeing the activities of market participants;
and the protection of the developing wholesale market from potential market
power abuses. Each of these benefits is important to meeting the Legislative
directive to protect the public interest by facilitating the effective and
efficient operation of electricity markets and the reliable delivery of electricity
during the transition to a fully competitive electric power industry.
Mr. Sullivan has determined that, for each year of the first five years
the proposed section is in effect, there may be economic costs to persons
who are required to comply with the proposed section. These costs are associated
with the record-retention requirement included in the rule. The amount of
such costs is likely to vary from business to business, and is difficult to
ascertain. The rule requires market participants to maintain certain records
for a period of four years. To the extent that a market participant already
maintains such records for that period, the rule would impose no new costs.
If a particular market participant does not maintain such records or maintains
them for a shorter period, the rule would impose some costs on that particular
participant. Such costs would be related to the expense of storing the documents
for the required time and would vary from business to business, but should
be relatively minor. However, it is believed that the other public benefits,
outlined above, accruing from implementation of the proposed section will
far outweigh these costs.
There will be no adverse economic effect on small businesses or micro-businesses
as a result of enforcing this section. Most of the market participants in
ERCOT do not qualify as small businesses or micro-businesses. Certain power
generation companies may be micro-businesses or small businesses. Like larger
power generation companies, they may face additional costs related to the
record retention requirements included in the rule. Using the rates of commercial
record-retention companies as a proxy, the commission estimates that the cost
of storing and accessing the required records would be approximately fifty
dollars ($50) per month. For a small business with $500,000 in annual gross
receipts, this would be equivalent to approximately one cent ($.01) per $100
of sales. The largest businesses affected by this rule may already be subject
to reporting and record keeping requirements of the Federal Energy Regulatory
Commission and would probably have in-house record retention facilities. Although
they would have a larger volume of records, their annual gross receipts would
also be larger than a small business. The cost of compliance for the largest
businesses affected by this rule is less than one cent ($.01) per $100 of
sales. As indicated above in the discussion of the public benefits of the
rule, the commission believes that the implementation of the proposed rule
will have a beneficial impact on market participants, including small businesses
and micro-businesses, by ensuring the availability of reliable transmission
and ancillary services at reasonable prices. This will reduce the costs incurred
by small or micro-sized power generation companies and enable them to deliver
their product to their customers. The cost savings and benefits to small businesses
and micro-businesses generated by the rule will more than offset the compliance
costs, resulting in a net economic benefit to small businesses and micro-businesses.
For this reason the commission concludes that the adoption of the proposed
rule would not have an adverse economic effect on small businesses and micro-businesses.
Patrick J. Sullivan, Legal and Enforcement Division, has also determined
that for each year of the first five years the proposed section is in effect
there should be no effect on a local economy, and therefore no local employment
impact statement is required under Administrative Procedure Act §2001.022.
The commission staff will conduct a public hearing on this rulemaking under
the Administrative Procedure Act, Texas Government Code §2001.029 at
the commission's offices, located in the William B. Travis Building, 1701
North Congress Avenue, Austin, Texas 78701, on Tuesday, October 7, 2003 at
10:00 a.m.
Comments on the proposed new section (16 copies) may be submitted to the
Filing Clerk, Public Utility Commission of Texas, 1701 North Congress Avenue,
P.O. Box 13326, Austin, Texas 78711-3326, within 31 days after publication.
Reply comments may be submitted within 45 days after publication. Comments
should be organized in a manner consistent with the organization of the proposed
rule. The commission invites specific comments regarding the costs associated
with, and benefits that will be gained by, implementation of the proposed
section. The commission will consider the costs and benefits in deciding whether
to adopt the section. All comments should refer to Project Number 26201.
When commenting on specific subsections of the proposed rule, parties are
encouraged to describe "best practice" examples of regulatory policies, and
their rationale, that have been proposed or implemented successfully in other
states already undergoing electric industry restructuring, if the parties
believe that Texas would benefit from application of the same policies. The
commission is only interested in receiving "leading edge" examples which are
specifically related and directly applicable to the Texas statute, rather
than broad citations to other state restructuring efforts.
On June 26, 2003, the Federal Energy Regulatory Commission (FERC) issued
an order in Docket Nos. EL01-118-000 and EL01-118-001,
Investigation of Terms and Conditions of Public Utility Market-Based Rate
Authorizations
, proposing changes to the tariffs applicable to public
utilities authorized to charge market-based rates. The proposed changes would
impose provisions prohibiting a seller from engaging in anticompetitive behavior
or the exercise of market power. The proposed tariff provisions identify certain
transactions and practices that are prohibited and impose reporting and record
retention requirements on sellers. The order indicated that a violation of
these proposed provisions would constitute a tariff violation and the seller
could be subject to disgorgement of unjust profits, suspension of its market-based
rate authorization, or other appropriate non-monetary penalties. Because the
FERC order and proposed tariff provisions address much of the same subject
matter that the commission is addressing in the proposed new section, the
commission invites comments from interested persons concerning the two proposals.
Specifically the commission requests that interested persons answer the following
questions:
1. Compare and contrast the differences between the commission's proposed
rule and each of the six market behavior rules in the proposed tariff revisions
in the FERC order. What aspect of each proposal is best suited to prevent
potential anti-competitive and deceptive practices by market participants
in the ERCOT market, and why?
2. Should the commission attempt to harmonize the proposed new section
to the FERC's proposed tariff revisions? If so, what steps can and should
the commission take to that end?
This new section is proposed under the Public Utility Regulatory
Act, Texas Utilities Code Annotated §14.002 (Vernon 1998, Supplement
2003) (PURA), which provides the Public Utility Commission with the authority
to make and enforce rules reasonably required in the exercise of its powers
and jurisdiction; and specifically, PURA §15.023, which authorizes the
commission to impose an administrative penalty against a person who violates
the statute or the commission's rules; PURA §35.004, which requires that
the commission ensure that ancillary services necessary to facilitate the
transmission of electric energy are available at reasonable prices with terms
and conditions that are not unreasonably preferential, prejudicial, predatory,
or anticompetitive; PURA §39.001, which establishes the Legislative policy
to protect the public interest during the transition to and in the establishment
of a fully competitive electric power industry; PURA §39.101, which establishes
that customers are entitled to protection from unfair, misleading, or deceptive
practices and directs the commission to adopt and enforce rules to carry out
this provision and to ensure that retail customer protections are established
that afford customers safe, reliable, and reasonably priced electricity; PURA §39.151,
which requires the commission to oversee and review the procedures established
by an independent organization, directs market participants to comply with
such procedures, and authorizes the commission to enforce such procedures;
PURA §39.157, which directs the commission to monitor market power associated
with the generation, transmission, distribution, and sale of electricity and
provides enforcement power to the commission to address any market power abuses;
PURA §39.356, which allows the commission to revoke certain certifications
and registrations for violation of an independent organizations procedures,
statutory provisions, or the commission's rules; and PURA §39.357, which
authorizes the commission to impose administrative penalties in addition to
revocation, suspension, or amendment of certificates and registrations.
Cross Reference to Statutes: Public Utility Regulatory Act §§14.002,
15.023, 35.004, 39.001, 39.101, 39.151, 39.157, 39.356, and 39.357.
§25.503.Oversight of Wholesale Market Participants.
(a)
Purpose. The purpose of this section is to establish the
standards that the commission will apply in monitoring the activities of entities
participating in the markets administered by the Electric Reliability Council
of Texas (ERCOT) and enforcing the Protocols and Operating Guides of ERCOT
(Protocols). The standards contained in this rule are necessary to:
(1)
protect customers from unfair, misleading and deceptive
practices, including practices in the ERCOT-administered market;
(2)
ensure that ancillary services necessary to facilitate
the reliable transmission of electric energy are available at reasonable prices;
(3)
afford customers safe, reliable, and reasonably priced
electricity;
(4)
ensure that all wholesale market participants observe all
scheduling, operating, reliability, and settlement policies, rules, guidelines,
and procedures established in the ERCOT Protocols;
(5)
clarify prohibited activities in the ERCOT-administered
markets;
(6)
monitor and mitigate market power as authorized by the
Public Utility Regulatory Act (PURA) §39.157(a) and prevent market power
abuses;
(7)
clarify the standards and criteria the commission will
use when reviewing market activities;
(8)
clarify the remedies for non-compliance with the Protocols;
and
(9)
prescribe ERCOT's role in enforcing operating standards
within the ERCOT regional network.
(b)
Application. This section applies to all market participants,
as defined in subsection (c) of this section.
(c)
Definitions. The following words and terms when used in
this section shall have the following meaning, unless the context indicates
otherwise:
(1)
Artificial congestion--Congestion created when a market
participant schedules, dispatches or operates a resource in a way that creates
or exacerbates transmission congestion when an economically viable alternative
exists to dispatch its resources for meeting existing obligations in a way
that would not cause new congestion or worsen existing congestion.
(2)
Artificial shortage--Shortage created when a resource owner
or operator undertakes non-emergency maintenance, declares false or unnecessary
outages, or falsely represents the operational capabilities of its generation
facilities, in a manner that affects market prices through withholding of
production. An artificial shortage can also be created when a resource owner
or operator in other ways operates and schedules its facilities in a manner
intended to affect market prices through withholding of production.
(3)
Economically viable resource--Resource able to recover
its costs of production, including variable costs and short run fixed costs,
under prevailing market prices.
(4)
Efficient operation of the market--Market characterized
by the optimal utilization of resources, as happens when resources are economically
dispatched, subject to transmission constraints, and when the costs of resolving
transmission congestion are limited to costs necessary to justly compensate
market participants who effectively contribute to resolving the congestion.
(5)
Market participant--Any person or entity participating
in the ERCOT-administered wholesale market, including, but not limited to,
a load serving entity (including a municipally owned utility and an electric
cooperative,) a power marketer, a transmission and distribution utility, a
power generation company, a qualifying facility, an exempt wholesale generator,
ERCOT, and any entity conducting planning, scheduling, or operating activities
on behalf of such market participants.
(6)
Market power abuses--Practices that are unreasonably discriminatory
or tend to unreasonably restrict, impair, or reduce the level of competition,
including practices that tie unregulated products or services to regulated
products or services. Predatory pricing, withholding of production, precluding
entry, collusion, and a violation of §25.272 of this title (relating
to Code of Conduct for Electric Utilities and Their Affiliates,) or §25.273
of this title (relating to Contracts Between Electric Utilities and Their
Competitive Affiliates) are also market power abuses for purposes of this
section.
(7)
Official interpretation of the Protocols--Clarification
of a provision of the Protocols issued by a designated ERCOT official in consultation
with the commission staff as delineated in subsection (h) of this section.
Commission orders, including interim orders, also constitute official interpretations
of the Protocols.
(8)
Protocols--The document that contains the scheduling, operating,
planning, reliability, and settlement procedures, standards, and criteria
in effect in the ERCOT-administered markets, including the ERCOT Protocols
and Operating Guides as approved by the commission, and as amended from time
to time.
(9)
Resource--Facilities capable of providing electrical energy
or load capable of reducing or increasing the need for electrical energy or
providing short-term reserves into the ERCOT system. This includes generation
resources and loads acting as resources (LaaRs).
(d)
Standards and criteria for enforcement of Protocols. The
commission will monitor the activities of market participants to determine
if such activities are consistent with the Protocols, and whether they constitute
market power abuses or are unfair, misleading, or deceptive practices affecting
customers. If an activity is not expressly addressed in the Protocols, or
if portions of the Protocols related to an activity are ambiguous, the commission
will be guided by the purposes and intent of the Protocols to determine whether
the activity is consistent with the Protocols.
(1)
The Protocols are intended to serve the following purposes:
(A)
to ensure that the reliability of the ERCOT electric system
is maintained at all times;
(B)
to support the efficient operation of the market; and
(C)
to ensure that all market participants have an equal opportunity
to participate and compete in the ERCOT-administered markets in a manner that
is not unduly discriminatory.
(2)
When reviewing the activities of a market participant,
the commission will consider whether the activity was conducted in a manner
that:
(A)
adversely affected customers through the use of unfair,
misleading, or deceptive practices;
(B)
reduced the competitiveness of the market or in other ways
unfairly impacted other market participants;
(C)
disregarded its effect on the reliability of the ERCOT
electric system;
(D)
undermined the efficient operation of the market; or
(E)
unduly restricted another market participant's participation
in the market.
(e)
Guiding ethical standards. Each market participant is expected
to:
(1)
conduct its business activities in accordance with the
purpose and intent of the Protocols as described in subsection (d) of this
section;
(2)
observe all applicable laws, regulations, and rules;
(3)
schedule, bid, and operate its resources in a manner consistent
with the Protocols to ensure the efficient and reliable operation of the ERCOT
electric system; and
(4)
not engage in activities and transactions that create artificial
congestion or artificial supply shortages, artificially boost revenues or
volumes, or manipulate the market or market prices in any way.
(f)
Duties of market participants.
(1)
Each market participant shall be knowledgeable about the
Protocols.
(2)
Market participants shall comply with the Protocols and
any official interpretation of the Protocols issued by ERCOT or the commission.
(A)
If a market participant disagrees with any provision of
the Protocols or any official interpretation of the Protocols, it may seek
an amendment of the Protocols as provided for in the Protocols, appeal an
ERCOT official interpretation to the commission, or both.
(B)
A market participant appealing an official interpretation
of the Protocols or seeking an amendment to the Protocols shall comply with
the Protocols unless and until the interpretation is officially changed or
the amendment is officially adopted.
(C)
A market participant may be excused from compliance with
ERCOT instructions or Protocol requirements only if such non-compliance is
due to communication or equipment failure beyond the reasonable control of
the market participant; when compliance would jeopardize public health and
safety or the reliability of the ERCOT transmission grid, or create risk of
bodily harm or damage to the equipment, or would be inconsistent with facility
licensing, environmental, or legal requirements. A market participant is excused
under this subparagraph only for so long as the condition continues.
(3)
Whenever the Protocols require that a market participant
make its "best effort" or a "good faith effort" to meet a requirement, or
similar language, the market participant shall act in accordance with the
requirement unless:
(A)
it is not technically possible to do so;
(B)
doing so would jeopardize public health and safety or the
reliability of the ERCOT transmission grid, or would create a risk of bodily
harm or damage to the equipment; or
(C)
doing so would be inconsistent with facility licensing,
environmental, or legal requirements.
(4)
In each instance when a market participant is not able
to comply with a Protocol requirement or official interpretation of a requirement,
or honor a formal commitment to ERCOT, the market participant has an obligation
to notify ERCOT immediately upon learning of such constraints. A market participant
who does not comply with a Protocol requirement or official interpretation
of a requirement, or honor a formal commitment to ERCOT, has the burden to
demonstrate why it cannot comply with the Protocol requirement or official
interpretation of the requirement, or honor the commitment.
(5)
The commission staff may request information from a market
participant concerning a notification of failure to comply with a Protocol
requirement or official interpretation of a requirement, or honor a formal
commitment to ERCOT. The market participant shall provide a complete response
to the commission staff within seven days of a request for information demonstrating
the claimed inability to comply.
(6)
A market participant's bids of energy and ancillary services
shall be from resources that are available and capable of performing, and
shall be feasible within the limits of the operating characteristics indicated
in the resource plan, as defined in the Protocols, and consistent with the
portfolio ramp rate specified in the bid, as defined in the Protocols.
(7)
All statements, data and information provided by a market
participant to ERCOT, the commission, a reporter, or a publisher, shall be
true and accurate, complete, and consistent with the market participant's
actual or anticipated operations of its resources. The market participant
is responsible for the information contained in all statements, data, and
information it issues through its personnel.
(8)
A market participant shall comply with all reporting requirements
governing the availability and maintenance of a generating unit or transmission
facility, including outage scheduling reporting requirements. A market participant
shall immediately notify ERCOT when capacity changes or resource limitations
occur that affect the availability of a unit or facility, the anticipated
operation of its resources, or the ability to comply with ERCOT dispatch instructions.
(9)
Market participants shall comply with requests for information
or data by ERCOT as specified by the Protocols or ERCOT instructions within
the time specified by ERCOT instructions, or such other time agreed to by
ERCOT and the market participant.
(10)
When a Protocol provision or its applicability is unclear,
or when a situation arises that is not contemplated under the Protocols, a
market participant seeking clarification of the Protocols shall use the process
for requesting formal Protocol clarifications or interpretations described
in subsection (h) of this section.
(11)
A market participant operating in the ERCOT markets or
a member of the ERCOT staff who identifies a provision that produces outcomes
inconsistent with the efficient and reliable operation of the ERCOT-administered
markets shall call the provision to the attention of the appropriate ERCOT
subcommittee. All market participants shall pro-actively work with the ERCOT
subcommittees, ERCOT staff, and the commission staff to develop Protocols
that are clear and consistent.
(12)
Each market participant shall establish internal procedures
that instruct its personnel on how to implement the Protocols according to
the standards delineated in this section. Each market participant shall establish
clear lines of accountability for its market practices.
(g)
Prohibited activities. Any act or practice of a market
participant that adversely affects the reliability of the regional electric
network or the proper accounting for the production and delivery of electricity
among market participants is considered a "prohibited activity." Activities
that constitute market power abuses are also prohibited. The term "prohibited
activity" in this subsection excludes acts or practices expressly allowed
by the Protocols or by official interpretations of the Protocols and acts
or practices conducted in compliance with express directions from ERCOT or
commission rule or order. The term "prohibited activity" includes, but is
not limited to, the following acts and practices that have been found to cause
prices that are not reflective of market forces or to adversely affect the
reliability of the electric network and the proper accounting for market transactions:
(1)
A market participant shall not schedule, operate, and dispatch
its generating units in a way that creates artificial congestion or artificially
worsens existing congestion.
(2)
A market participant shall not, through the scheduling
or operation of its facilities, create artificial supply shortages. However,
market participants may decide not to operate their facilities or bid and
schedule such facilities under the following circumstances:
(A)
when such actions would jeopardize public health and safety
or damage their facilities;
(B)
in order to comply with facility licensing, environmental
or other legal requirements; or
(C)
when such actions would not be economically viable under
the given circumstances.
(3)
A market participant shall not arrange and execute simultaneous
offsetting buy and sell trades with the same counterparty, price, commodity,
location and quantity terms, in a manner that artificially inflates reported
revenues, trading volumes, or prices.
(4)
Market participants shall not offer reliability products
to the market that cannot or will not be provided if selected.
(5)
Market participants shall not conduct trades that result
in a misrepresentation of the financial condition of the organization.
(6)
Market participants shall not engage in fraudulent behavior
related to their participation in the wholesale market.
(7)
Market participants shall not collude with other market
participants to affect the price or supply of power, allocate territories,
customers or products, or otherwise unlawfully restrain competition. This
provision should be interpreted in accordance with federal and state antitrust
statutes and judicially-developed standards under such statutes regarding
collusion.
(8)
A market participant shall not engage in economic withholding.
For the purposes of this subsection, "economic withholding" means an offer
of energy or capacity by a market participant in an amount sufficiently large
that the market cannot clear without the offer, and part or all of which is
priced above competitive market levels, resulting in a price that is not reflective
of a competitive market.
(9)
A market participant shall not engage in any bidding strategy
that increases market prices above competitive levels when operational emergencies,
extreme weather events, intentional acts of harm, or other situations require
ERCOT to deploy or procure all energy or capacity that has been offered into
the market.
(10)
A market participant shall not engage in any other conduct
that violates the ethical standards established in subsection (e) of this
section or the duties imposed by subsection (f) of this section.
(h)
Official interpretations and clarifications regarding the
Protocols. ERCOT shall develop a process for formally addressing requests
for clarification of the Protocols submitted by market participants or issuing
official interpretations regarding the application of Protocol provisions
and requirements.
(1)
ERCOT shall designate an ERCOT official who will be authorized
to receive requests for clarification from, and issue responses to market
participants, and to issue official interpretations on behalf of ERCOT regarding
the application of Protocol provisions and requirements.
(2)
The designated ERCOT official shall provide a copy of the
clarification request to commission staff upon receipt. The ERCOT official
shall consult with ERCOT operational or legal staff as appropriate and with
commission staff before issuing an official Protocol clarification or interpretation.
(3)
The designated ERCOT official may decide, in consultation
with the commission staff, that the language for which a clarification is
requested is ambiguous or for other reason beyond ERCOT's ability to clarify,
in which case the ERCOT official shall instruct the requestor to take the
request through the Protocol revision process provided for in the Protocols.
(4)
All official Protocol clarifications or interpretations
that ERCOT issues in response to a market participant's formal request or
upon ERCOT's own initiative shall be sent out in a market bulletin with appropriate
effective date specified to inform all market participants, and a copy of
the clarification or interpretation shall be maintained in a manner that is
accessible to market participants. Such response shall not contain information
that would identify the requesting market participant.
(5)
The opinion of individual ERCOT staff members not specifically
authorized to respond to market participant's requests for protocol clarifications
do not constitute official clarifications or interpretations of the Protocols.
(i)
Role of ERCOT in enforcing operating standards. ERCOT shall
develop and submit for commission approval a process to monitor occurrences
of non-compliance with the Protocols that have the potential to impede ERCOT
operations, create significant burden or place significant costs on other
market participants, or represent a risk to system security. Non-compliance
indicators monitored by ERCOT shall include, but should not be limited to,
schedule control error, failing resource plan performance measures as established
by ERCOT, failure to follow dispatch instructions within the required time,
failure to perform ancillary services obligations, failure to submit mandatory
bids, and other instances of Protocols non-compliance of a similar magnitude.
(1)
ERCOT shall keep a record of all such instances of non-compliance
with the Protocols and shall develop a system for tracking recurrence of such
instances of non-compliance.
(2)
ERCOT shall keep a record of the resolution of such instances
of non-compliance and of remedial actions taken by the market participant
in each instance.
(3)
ERCOT shall inform the commission staff immediately if
the issue is not resolved after the system operator has orally informed the
market participant of the problem, or if the same instance of non-compliance
is repeated more than once in a six-month period.
(j)
Standards for record keeping.
(1)
A market participant who schedules through a qualified
scheduling entity (QSE) that submits schedules to ERCOT on behalf of more
than one market participants shall maintain records to show scheduling and
bidding information for all schedules and bids that its QSE has submitted
to ERCOT on its behalf, by interval.
(2)
All market participants shall maintain records relative
to their activities in the ERCOT-administered markets to show:
(A)
transaction information, including the date, type of transaction,
amount of transaction, and entities involved;
(B)
all verbally dispatched instructions (VDIs) received from
ERCOT;
(C)
information and documentation of all planned and forced
generation and transmission outages including all documentation necessary
to document the legitimacy of the outage;
(D)
information disclosed to the media, including market publications
and publishers of surveys and price indices, including the date, information
disclosed, and entities involved; and
(E)
reports of financial information, including the date, financial
results reported, and the official of the market participant to whom financial
information was reported, if applicable.
(3)
All records except VDIs shall be kept for a minimum of
three years from the date of the event. VDIs records shall be kept for a minimum
of two years. All records shall be made available to the commission for inspection
upon request.
(4)
Market participants may provide such information to the
commission under a confidentiality agreement or protective order pursuant
to §22.71(d) of this title (relating to Filing of Pleadings, Documents,
and Other Material).
(k)
Investigation. The commission staff may initiate an informal
fact-finding review based on a complaint or upon its own initiative to obtain
information regarding facts, conditions, practices, or matters that it may
find necessary or proper to ascertain in order to evaluate whether any market
participant has violated any provision of this section.
(1)
The commission staff will contact the market participant
whose activities are in question to provide the market participant an opportunity
to explain its activities. The commission staff may require the market participant
to provide information reasonably necessary for the purposes described in
this subsection.
(2)
If the market participant asserts that the information
requested by commission staff is confidential, the information shall be provided
to commission staff as confidential information related to settlement negotiations
pursuant to §22.71(d)(4) of this title.
(3)
If after conducting its fact-finding review, the commission
staff determines that a market participant may have violated this section,
it may request that the commission initiate a formal investigation against
the market participant pursuant to §22.241 of this title (relating to
Investigations).
(4)
If, as a result of its investigation, commission staff
determines that there is evidence of a violation of this section by a market
participant, it may request that the commission initiate appropriate enforcement
action against the market participant, including but not limited to, revocation,
suspension, or amendment of a certificate, license or registration issued
by the commission, assessment of administrative penalties, or actions for
civil or criminal penalties. The commission may also direct ERCOT to suspend
or terminate its agreement with a QSE.
(5)
A market participant subject to an informal fact-finding
review or a formal investigation by the commission has an obligation to fully
cooperate with the investigation, to make company representatives available
to discuss the subject of the investigation with the commission staff, and
to respond to the commission staff's requests for information in a reasonable
time frame as requested by the commission staff.
(6)
The procedure for informal fact-finding review established
in this subsection does not prevent an aggrieved person or commission staff
from filing a formal complaint with the commission pursuant to §22.242
of this title (relating to Complaints) or pursuing other relief available
by law.
(l)
Remedies. If the commission finds that a market participant
is in violation of this section, the commission shall order the market participant
to take corrective action as necessary. Additionally, the commission may seek
criminal prosecution under the Public Utility Regulatory Act (PURA) or seek
other remedies as it determines appropriate for the violation involved.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on July 31, 2003.
TRD-200304640
Rhonda G. Dempsey
Rules Coordinator
Public Utility Commission of Texas
Earliest possible date of adoption: September 14, 2003
For further information, please call: (512) 936-7308