News Release

September 30, 2011

ERCOT announces settlement on 2008 compliance violations

The Electric Reliability Council of Texas (ERCOT), the state grid operator, announced today that it has signed a settlement with Texas Reliability Entity, Inc., regarding ERCOT’s compliance with reliability standards in 2008. 

The North American Electric Reliability Corporation (NERC) is filing a notice of penalty and settlement today, assessing a $384,000 fine for 15 violations that occurred in 2008.  

Nine of the 15 standards that are the subject of the settlement agreement were related to declaration and implementation of a level-two grid emergency which occurred Feb. 26, 2008; five were identified during a compliance audit Sept. 9-12, 2008 by the Texas Reliability Entity; and one involved an ERCOT self-report regarding instances in 2008 when reliability-related directives were not repeated back by the recipients.  (A detailed list of the violations and related reliability standard will be available on the NERC site after the filing.) 

“These issues date back nearly four years ago when the NERC compliance monitoring program, and how auditors would apply the new standards, was new to the industry and the ERCOT region,” CEO Trip Doggett said.  “It was these findings that prompted us to re-evaluate our compliance program and make some substantial changes.” 

Some of the changes ERCOT implemented in 2009 included hiring a chief compliance officer, centralizing the compliance program, and aligning corporate policies and protocols with NERC standards, Doggett said.

 “As a result of our renewed emphasis to educate staff on NERC standards and build a culture of compliance, we have had very positive outcomes from the NERC audits in 2009 and 2010,” Doggett said.  “In fact, we were very pleased to receive recognition of ERCOT’s compliance culture, transparency and desire for excellence in recent NERC audits and site visits.” 

Upon approval from the Federal Energy Regulatory Commission, the fine will be paid out of the surplus savings in the current year’s budget, Doggett said.   

ERCOT Inc. is a membership-based 501(c)(4) nonprofit corporation, primarily funded by a system administration fee which is assessed on wholesale energy transactions, about 42 cents per month or $5 per year, based on 1,000 kilowatt-hour usage per month. 

ERCOT is governed by a board of directors and primarily regulated by the Public Utility Commission of Texas and the Texas Legislature.   For federal reliability standards, ERCOT is accountable to the Texas Reliability Entity, the North American Electric Reliability Corporation, and the Federal Energy Regulatory Commission.

The Electric Reliability Council of Texas (ERCOT) manages the flow of electric power to more than 25 million Texas customers -- representing about 90 percent of the state’s electric load. As the independent system operator for the region, ERCOT schedules power on an electric grid that connects more than 46,500 miles of transmission lines and 650+ generation units. It also performs financial settlement for the competitive wholesale bulk-power market and administers retail switching for nearly 8 million premises in competitive choice areas.

ERCOT is a membership-based 501(c)(4) nonprofit corporation, governed by a board of directors and subject to oversight by the Public Utility Commission of Texas and the Texas Legislature. Its members include consumers, cooperatives, generators, power marketers, retail electric providers, investor-owned electric utilities, transmission and distribution providers and municipally owned electric utilities.

Contact

media@ercot.com

512-275-7432