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Staff of the Texas Public Utilities Commission reach Settlement Agreement and Report to the Commission regarding Staff’ s investigation of NRG Curtailment Solutions (NRGCS) for violations of 16 Texas Administrative Code (TAC) § 25.503(g)(3), and Electric Reliability Council of Texas (ERCOT) Nodal Protocols § 8.1.3.2(1).  Excerpts from the agreement are provided below:

{***} The Staff of the Public Utility Commission (Commission Staff), and NRG Curtailment Solutions, Inc. *NRGCS) (collectively, the parties) enter into this settlement agreement (agreement) and report to the Commission. This agreement resolves and concludes the Commission Staff’ s investigation of NRGCS for violations of 16 Texas Administrative Code (TAC) § 25.503(g)(3), and Electric Reliability Council of Texas (ERCOT) Nodal Protocols § 8.1.3.2(1). {***}

{***} Violations of 16 TAC # 25.503(j:)(3) 

8. Under 16 TAC § 25.503(g)(3), a market participant must not offer reliability products to the market that cannot or will not be provided if selected. 
9. From June 2021 through February 2023, NRGCS violated 16 TAC § 25.503(g)(3) on 15 occasions by offering ERS resources for reliability services that had failed three or more deployment tests. As a result, the offered resources were incapable of providing the contractually obligated ERS services if deployed during an actual event.

Violations of ERCOT Nodal Protocols 8.1.3.2(1) 

10. Under ERCOT Nodal Protocols § 8.1.3.2(l), ERCOT may conduct an unannounced test of any ERS resource at any time during an ERS time period in which the ERS resource is contracted to provide ERS. A test shall be deemed to be successful if the ERS resource achieves both a test performance factor of 0.95 or greater and an EIPF for the full first interval of the test of 0.95 or greater. 
11. ERCOT conducted 146 deployment tests on 52 NRGCS ERS resources from June 2021 through February 2023. NRGCS ERS resources failed 91 deployment tests (62.3% failure rate), with 15 NRGCS ERS resources failing three or more consecutive deployment tests during the investigated period.

Corrective Actions: 

{***} 12. NRGCS will reinforce program education and training for its sales and customer-facing teams to better identify and target appropriate resources for the ERS program.

13. NRGCS will launch an effort to gain Smart Meter Texas access for all existing resources and require access for all new resources. With this access, interval data will be readily available in near real-time to analyze historical usage and determine preliminary performance results from ERS tests and deployment events. 
14. During the onboarding process, new resources are required to complete a form where the resource’ s contact information for dispatching is listed. NRGCS has updated the form to focus on requesting contact information for the specific ERS Time Period(s) in which the resource is looking to be enrolled. 
15. NRGCS has implemented an internal testing process requiring certain resources to perform an NRGCS-administered test prior to being enrolled in upcoming SCTs. {***}

Excerpts from Agreement:

{***} 16. On May 6,2024, Commission Staff notified NRGCS of the results of its investigation and provided information about NRGCS’ opportunity to explain its activities and rights to a hearing. 

17. NRGCS cooperated with Commission Staff’s investigation. 
18. Under PURA § 15.023, the Commission is authorized to impose administrative penalties against NGRCS for violations of PURA or rules adopted under PURA. 19. Under PURA § 15.023 and 16 TAC § 25.8(b), the Commission is authorized to impose an administrative penalty of up to $25,000 per day for Class A violations, up to $5,000 per day for Class B violations, and up to $1,000 per day for Class C violations. 
19. The violations described herein are Class A violations under 16 TAC § 25.8(b)(3). 
20. Commission Staff recommends, and NRGCS agrees to pay, an administrative penalty of $230,000 in resolution of the violations acknowledged in this agreement and in the attached proposed order. 
21. In support of the agreed administrative penalty, Commission Staff provides the following analysis of factors to be considered when determining a reasonable and appropriate administrative penalty, as required under PURA § 15.023(c) and 16 TAC § 22.246(c)(3) {***}

Excerpts from Settlement Terms: 

{***} 23. This agreement resolves all claims related to Commission Staff’s investigation of NRGCS concerning violations of 16 TAC § 25.503(g)(3), and ERCOT Nodal Protocols § 8.1.3.2(1) from June 2021 through February 2023, as described in this agreement and in the attached proposed order. 

24. Unless specifically provided by in this agreement, NRGCS waives any notice and procedures that might otherwise be authorized or required in this proceeding. 
25. Nothing in this agreement shall limit Commission Staff’ s ability to perform its enforcement functions as set forth under PURA and the Commission rules. 
26. A party’ s support of the resolution of this docket in accordance with this agreement may differ from its position or testimony regarding contested issues of law, policy, or fact in other proceedings before the Commission or other forums. Because this is a settlement agreement, a party is under no obligation to take the same position as set out in this agreement in other proceedings not referenced in this agreement, whether those dockets present the same or a different set of circumstances. The parties’ agreement to entry of a final order of the Commission consistent with this agreement should not be regarded as an agreement as to the appropriateness or correctness of any assumptions, methodology, or legal or regulatory principle that may have been employed in reaching this agreement. 
27. The parties contemplate that this agreement will be approved pursuant to 16 TAC § 22.246(h)(1)(c). If, however, the Commission issues an order that materially changes the terms ofthis agreement, the parties agree that any party adversely affected by that material alteration has the right to withdraw from this agreement, thereby becoming released from its obligations arising hereunder, and to proceed as otherwise permitted by law to exercise all rights available under law. The right to withdraw must be exercised by filing a written notice in the proceeding within seven calendar days of the date the Commission files the final order acting on this agreement. Failure to file a notice of withdrawal within the specified time period constitutes acceptance ofthe material changes to this agreement made by the Commission.
28. This agreement is the final and entire agreement between the parties regarding Commission Staff’ s investigation of NRGC S concerning the violations described herein and supersedes all other communications among the parties or their representatives regarding its terms. {***}

Settlement Agreement and Report to the Commission  (12/09/2024)
57408 (12/09/2024)
Settlement Agreement And Report To The Commission Regarding NRG Curtailment Solutions, Inc’s Violations Of 16 Tac § 25.503(G)(3), And ERCOT Nodal Protocols § 8.1.3.2, Related To Testing Of Emergency Response Service Resources.