Dallas, TX – February 25, 2010 – In a case important to all participants in Texas’s electric markets, LWS obtained a favorable order regarding the proper calculation of an administrative penalty under Section 15.023 of the Texas Public Utility Regulatory Act (PURA). For many years and in a large number of proceedings, the Executive Director and Staff of the Public Utility Commission of Texas have maintained that, for purposes of an administrative penalty under PURA, each megawatt involved in the allegedly wrongful action constitutes a separate “violation” subject to a separate administrative penalty of up to $25,000. As a result, the Executive Director has sought enormous administrative penalties from alleged violators of the Act and the Commission’s rules.
In Docket No. 37634, LWS represented Luminant Energy Company LLC in challenging Staff’s method for calculating penalties. Luminant argued in that proceeding that an administrative penalty could only be assessed on the single wrongful act or inaction of failing to timely dispatch a LaaR obligation following an ERCOT deployment instruction, while Staff claimed that it could assess a penalty for each MW not timely deployed. After extensive briefing by the parties and the submission of an amicus brief, the Commission rejected Commission Staff’s penalty theory and adopted Luminant’s position. See PUC Docket No. 37634, Agreed Notice of Violation and Settlement Agreement Relating to Luminant Energy Company LLC’s Violation Of PURA § 39.151(j) and PUC Subst. R. 25.503(f)(2), Relating to Failure to Adhere to ERCOT Protocol 126.96.36.199(1) Concerning Load Acting as Resource Service Requirements, Order on Certified Issue at 3 (Feb. 25, 2010).