PART 2. PUBLIC UTILITY COMMISSION OF TEXAS
CHAPTER 22. PROCEDURAL RULES
SUBCHAPTER M. PROCEDURES AND FILING REQUIREMENTS IN PARTICULAR COMMISSION PROCEEDINGS
The Public Utility Commission of Texas (commission) proposes amendments to 16 Texas Administrative Code (TAC) §22.246, relating to Administrative Penalties.
This proposed rule will implement, in part, Public Utility Regulatory Act (PURA) §15.023 as revised by House Bill 1500 during the Texas 88th Regular Legislative Session. The amended rule adds whether a person complied with a voluntary mitigation plan as a factor for the commission to consider when determining the amount of an administrative penalty. The amended rule also removes redundant provisions and replaces them with a reference to §25.8 of this title (relating to Classification System for Violations of Statutes, Rules, and Orders Applicable to Electric Service Providers).
Growth Impact Statement
The agency provides the following governmental growth impact statement for the proposed rule, as required by Texas Government Code §2001.0221. The agency has determined that for each year of the first five years that the proposed rule is in effect, the following statements will apply:
(1) the proposed rule will not create a government program and will not eliminate a government program;
(2) implementation of the proposed rule will not require the creation of new employee positions and will not require the elimination of existing employee positions;
(3) implementation of the proposed rule will not require an increase and will not require a decrease in future legislative appropriations to the agency;
(4) the proposed rule will not require an increase and will not require a decrease in fees paid to the agency;
(5) the proposed rule will not create a new regulation;
(6) the proposed rule will expand an existing regulation;
(7) the proposed rule will not change the number of individuals subject to the rule's applicability; and
(8) the proposed rule will not affect this state's economy.
Fiscal Impact on Small and Micro-Businesses and Rural Communities
There is no adverse economic effect anticipated for small businesses, micro-businesses, or rural communities as a result of implementing the proposed rule. Accordingly, no economic impact statement or regulatory flexibility analysis is required under Texas Government Code §2006.002(c).
Takings Impact Analysis
The commission has determined that the proposed rule will not be a taking of private property as defined in chapter 2007 of the Texas Government Code.
Fiscal Impact on State and Local Government
Barksdale English, Director, Division of Compliance and Enforcement, has determined that for the first five-year period the proposed rule is in effect, there will be no fiscal implications for the state or for units of local government under Texas Government Code §2001.024(a)(4) as a result of enforcing or administering the section.
Public Benefits
Mr. English 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 alignment of commission rules with the statutory requirement that the commission consider adherence with a voluntary mitigation plan when evaluating violations of PURA §39.157 or rules adopted by the commission under that section. There will be no probable economic cost to persons required to comply with the rule under Texas Government Code §2001.024(a)(5).
Local Employment Impact Statement
For each year of the first five years the proposed section is in effect, there should be no effect on a local economy; therefore, no local employment impact statement is required under Texas Government Code §2001.022.
Costs to Regulated Persons
Texas Government Code §2001.0045(b) does not apply to this rulemaking because the commission is expressly excluded under subsection §2001.0045(c)(7).
Public Hearing
The commission staff will conduct a public hearing on this rulemaking if requested in accordance with Texas Government Code §2001.029. The request for a public hearing must be received by February 22, 2024. If a request for public hearing is received, commission staff will file in this project a notice of hearing.
Public Comments
Interested persons may file comments electronically through the interchange on the commission's website. Comments must be filed by February 22, 2024. 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 rule. The commission will consider the costs and benefits in deciding whether to modify the proposed rule on adoption. All comments should refer to Project Number 55955. Parties may provide comments on the Chapter 22 and Chapter 25 proposals filed in this project in a single filing.
Each set of comments should include a standalone executive summary as the last page of the filing. This executive summary must be clearly labeled with the submitting entity's name and should include a bulleted list covering each substantive recommendation made in the comments.
Statutory Authority
The amendment is proposed under Public Utility Regulatory Act (PURA) §14.001, which grants the commission the general power to regulate and supervise the business of each public utility within its jurisdiction and to do anything specifically designated or implied by this title that is necessary and convenient to the exercise of that power and jurisdiction; §14.002, which authorizes the commission to adopt and enforce rules reasonably required in the exercise of its powers and jurisdiction; and §15.023, which authorizes the commission to impose an administrative penalty of up to $1,000,000 for a violation of a voluntary mitigation plan.
Cross Reference to Statute: Public Utility Regulatory Act §§14.001; 14.002; and 15.023.
§22.246.Administrative Penalties.
(a) - (b) (No change.)
(c) Amount of administrative penalty for violations of PURA or a rule or order adopted under PURA.
(1) (No change.)
(2) The administrative penalty for each separate violation
of PURA or of a rule or order adopted under PURA may not exceed
the limits established by §25.8 of this title (relating to Classification
System for Violations of Statutes, Rules, and Orders Applicable to
Electric Service Providers) [PURA §35.0021, PURA §38.075,
or a commission rule or commission order adopted under PURA §35.0021
or PURA §38.075 will be in an amount not to exceed $1,000,000
per violation per day. For all other violations, the administrative
penalty for each separate violation will be in an amount not to exceed
$25,000 per violation per day. An administrative penalty in an amount
that exceeds $5,000 may be assessed only if the violation is included
in the highest class of violations in the classification system].
(3) The amount of the administrative penalty must be based on:
(A) the seriousness of the violation, including the nature, circumstances, extent, and gravity of any prohibited acts, and the hazard or potential hazard created to the health, safety, or economic welfare of the public;
(B) the economic harm to property or the environment caused by the violation;
(C) the history of previous violations;
(D) the amount necessary to deter future violations;
(E) efforts to correct the violation; [and]
(F) adherence with an applicable voluntary mitigation plan approved by the commission under §25.504 of this title (relating to Wholesale Market Power in the Electric Reliability Council of Texas Power Region); and
(G) [(F)] any other matter that
justice may require, including, but not limited to, the respondent's
timely compliance with requests for information, completeness of responses,
and the manner in which the respondent has cooperated with the commission
during the investigation of the alleged violation.
(d) - (f) (No change.)
(g) Options for response to notice of violation or continuing violation.
(1) - (4) (No change.)
(5) Opportunity to remedy a weather preparedness violation.
(A) - (C) (No change.)
(D) For purposes of this paragraph, the following provisions apply unless a provision conflicts with a commission rule or order adopted under PURA §35.0021 or §38.075, in which case, the commission rule or order applies.
(i) Not all violations to which this paragraph applies
can be remedied. Subparagraph [Clauses] (C)(i)
and [(C)](ii) of this paragraph do not apply to a violation
that cannot be remedied.
(ii) For purposes of subparagraph [clauses
] (C)(i) and [(C)](ii) of this paragraph, an entity
that claims to have remedied an alleged violation and, if applicable,
that the alleged violation was accidental or inadvertent has the burden
of proving its claim to the commission. Proof that an alleged violation
has been remedied and, if applicable, that the alleged violation was
accidental or inadvertent must be evidenced in writing, under oath,
and supported by necessary documentation.
(iii) (No change.)
(iv) If the independent organization certified under
PURA §39.151 has not provided an entity with a deadline, the
executive director will determine whether the deadline can be remedied
and, if so, the deadline for remedying a violation within a reasonable
period of time. The executive director will provide the entity with
written notice of the violation and the deadline for remedying the
violation within a reasonable period of time. This notice does not
constitute notice under subsection [paragraph]
(f)(2) of this section unless it fulfills the other requirements of
that subsection. However, the provisions of subsection [subparagraph
] (f)(2)(D) of this section apply to notice under this clause.
(v) - (vi) (No change.)
(vii) If the commission determines that the deadline
for remedying a violation provided by the independent organization
certified under PURA §39.151 or determined by the executive director
is unreasonable, the commission will determine what the deadline should
have been. The commission will use this updated deadline to determine
the applicability of subparagraph [subclauses]
(C)(i) and [(C)](ii) of this paragraph and, if appropriate,
as a factor in determining the magnitude of administrative penalty
to impose against the entity for the violation.
(h) - (k) (No change.)
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on January 19, 2024.
TRD-202400199
Adriana Gonzales
Rules Coordinator
Public Utility Commission of Texas
Earliest possible date of adoption: March 3, 2024
For further information, please call: (512) 936-7322
SUBCHAPTER A. GENERAL PROVISIONS
The Public Utility Commission of Texas (commission) proposes amendments to 16 Texas Administrative Code (TAC) §25.8, relating to Classification System for Violations of Statutes, Rules, and Orders Applicable to Electric Service Providers.
This proposed rule will implement, in part, Public Utility Regulatory Act (PURA) §15.023 as revised by H.B. 1500 during the Texas 88th Regular Legislative Session. The amended rule will increase the authorized penalty for violations of voluntary mitigation plans up to $1,000,000 per violation per day. The amendment also aligns violation definitions across classifications, consolidates violation descriptions, and adds a new description for "special violations."
Growth Impact Statement
The agency provides the following governmental growth impact statement for the proposed rule, as required by Texas Government Code §2001.0221. The agency has determined that for each year of the first five years that the proposed rule is in effect, the following statements will apply:
(1) the proposed rule will not create a government program and will not eliminate a government program;
(2) implementation of the proposed rule will not require the creation of new employee positions and will not require the elimination of existing employee positions;
(3) implementation of the proposed rule will not require an increase and will not require a decrease in future legislative appropriations to the agency;
(4) the proposed rule will not require an increase and will not require a decrease in fees paid to the agency;
(5) the proposed rule will not create a new regulation;
(6) the proposed rule will expand an existing regulation;
(7) the proposed rule will not change the number of individuals subject to the rule's applicability; and
(8) the proposed rule will not affect this state's economy.
Fiscal Impact on Small and Micro-Businesses and Rural Communities
There is no adverse economic effect anticipated for small businesses, micro-businesses, or rural communities as a result of implementing the proposed rule. Accordingly, no economic impact statement or regulatory flexibility analysis is required under Texas Government Code §2006.002(c).
Takings Impact Analysis
The commission has determined that the proposed rule will not be a taking of private property as defined in chapter 2007 of the Texas Government Code.
Fiscal Impact on State and Local Government
Barksdale English, Director, Division of Compliance and Enforcement, has determined that for the first five-year period the proposed rule is in effect, there will be no fiscal implications for the state or for units of local government under Texas Government Code §2001.024(a)(4) as a result of enforcing or administering the section.
Public Benefits
Mr. English 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 to incentivize market participants who enter into voluntary mitigation plans to comply with those plans. There will be no probable economic cost to persons required to comply with the rule under Texas Government Code §2001.024(a)(5).
Local Employment Impact Statement
For each year of the first five years the proposed section is in effect, there should be no effect on a local economy; therefore, no local employment impact statement is required under Texas Government Code §2001.022.
Costs to Regulated Persons
Texas Government Code §2001.0045(b) does not apply to this rulemaking because the commission is expressly excluded under subsection §2001.0045(c)(7).
Public Hearing
The commission staff will conduct a public hearing on this rulemaking if requested in accordance with Texas Government Code §2001.029. The request for a public hearing must be received by February 22, 2024. If a request for public hearing is received, commission staff will file in this project a notice of hearing.
Public Comments
Interested persons may file comments electronically through the interchange on the commission's website. Comments must be filed by February 22, 2024. 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 rule. The commission will consider the costs and benefits in deciding whether to modify the proposed rule on adoption. All comments should refer to Project Number 55955. Parties may file comments on the Chapter 22 and Chapter 25 proposals filed in this project in a single filing.
Each set of comments should include a standalone executive summary as the last page of the filing. This executive summary must be clearly labeled with the submitting entity's name and should include a bulleted list covering each substantive recommendation made in the comments.
Statutory Authority
The amendment is proposed under Public Utility Regulatory Act (PURA) §14.001, which grants the commission the general power to regulate and supervise the business of each public utility within its jurisdiction and to do anything specifically designated or implied by this title that is necessary and convenient to the exercise of that power and jurisdiction; §14.002, which authorizes the commission to adopt and enforce rules reasonably required in the exercise of its powers and jurisdiction; and §15.023, which authorizes the commission to impose an administrative penalty of up to $1,000,000 for a violation of a voluntary mitigation plan.
Cross Reference to Statute: Public Utility Regulatory Act §§14.001; 14.002; and 15.023.
§25.8.Classification System for Violations of Statutes, Rules, and Orders Applicable to Electric Service Providers.
(a) (No change.)
(b) Classification system.
(1) Class C violations.
(A) Penalties for Class C violations must [may] not exceed $1,000 per violation per day.
(B) (No change.)
(2) Class B violations.
(A) Penalties for Class B violations must [may] not exceed $5,000 per violation per day.
(B) All violations not specifically enumerated as a
Class C, [or] Class A, or special violations [violation] are Class B violations.
(3) Class A violations.
(A) [Each separate violation of PURA §35.0021,
PURA §38.075, or a commission rule or commission order adopted
under PURA §35.0021 or PURA §38.075 is a Class A violation
and the administrative penalty will not exceed $1,000,000 per violation
per day.] Penalties for [all other] Class A violations must [will] not exceed $25,000 per violation perday.
(B) (No change.)
(4) Special violations.
(A) "Special violations" does not constitute a class of violations for purposes of PURA §15.023(d).
(B) The following types of violations are special violations for which a penalty must not exceed $1,000,000 per violation per day.
(i) A violation of PURA §39.157(a) or §25.503(g)(7) of this title (relating to Oversight of Wholesale Market Participants) in conjunction with not adhering to an applicable voluntary mitigation plan adopted under PURA §15.023(f) or §25.504 of this title (relating to Wholesale Market Power in the Electric Reliability Council of Texas Power Region);
(ii) A violation of PURA §35.0021 or a commission rule or order adopted under PURA §35.0021; and
(iii) A violation of PURA §38.075 or a commission rule or order adopted under PURA §38.075.
(c) - (d) (No change.)
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on January 19, 2024.
TRD-202400200
Adriana Gonzales
Rules Coordinator
Public Utility Commission of Texas
Earliest possible date of adoption: March 3, 2024
For further information, please call: (512) 936-7322
The Public Utility Commission of Texas (commission) proposes amendments to 16 Texas Administrative Code (TAC) §25.504, relating to Wholesale Market Power in the Electric Reliability Council of Texas Power Region.
This proposed rule will implement Public Utility Regulatory Act (PURA) §15.023 as revised by House Bill 1500 during the Texas 88th Regular Legislative Session. The proposed rule provides that adhering to a voluntary mitigation plan is one factor that must be considered by the commission to determine whether a generation entity abused market power, rather than constituting an absolute defense against an allegation of market power abuse. In addition, the proposed rule amends the standards, process, and timelines under which voluntary mitigation plans are reviewed and approved or denied by the commission.
Growth Impact Statement
The agency provides the following governmental growth impact statement for the proposed rule, as required by Texas Government Code §2001.0221. The agency has determined that for each year of the first five years that the proposed rule is in effect, the following statements will apply:
(1) the proposed rule will not create a government program and will not eliminate a government program;
(2) implementation of the proposed rule will not require the creation of new employee positions and will not require the elimination of existing employee positions;
(3) implementation of the proposed rule will not require an increase and will not require a decrease in future legislative appropriations to the agency;
(4) the proposed rule will not require an increase and will not require a decrease in fees paid to the agency;
(5) the proposed rule will not create a new regulation;
(6) the proposed rule will expand an existing regulation;
(7) the proposed rule will not change the number of individuals subject to the rule's applicability; and
(8) the proposed rule will not affect this state's economy.
Fiscal Impact on Small and Micro-Businesses and Rural Communities
There is no adverse economic effect anticipated for small businesses, micro-businesses, or rural communities as a result of implementing the proposed rule. Accordingly, no economic impact statement or regulatory flexibility analysis is required under Texas Government Code §2006.002(c).
Takings Impact Analysis
The commission has determined that the proposed rule will not be a taking of private property as defined in chapter 2007 of the Texas Government Code.
Fiscal Impact on State and Local Government
Barksdale English, Director, Division of Compliance and Enforcement, has determined that for the first five-year period the proposed rule is in effect, there will be no fiscal implications for the state or for units of local government under Texas Government Code §2001.024(a)(4) as a result of enforcing or administering the section.
Public Benefits
Mr. English 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 that only voluntary mitigation plans that are in the public interest are approved, and that voluntary mitigation plans are kept up to date through a regular review process. There will be no economic cost to persons required to comply with the rule under Texas Government Code §2001.024(a)(5).
Local Employment Impact Statement
For each year of the first five years the proposed section is in effect, there should be no effect on a local economy; therefore, no local employment impact statement is required under Texas Government Code §2001.022.
Costs to Regulated Persons
Texas Government Code §2001.0045(b) does not apply to this rulemaking because the commission is expressly excluded under subsection §2001.0045(c)(7).
Public Hearing
The commission staff will conduct a public hearing on this rulemaking if requested in accordance with Texas Government Code §2001.029. The request for a public hearing must be received by February 22, 2024. If a request for public hearing is received, commission staff will file in this project a notice of hearing.
Public Comments
Interested persons may file comments electronically through the interchange on the commission's website. Comments must be filed by February 22, 2024. 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 rule. The commission will consider the costs and benefits in deciding whether to modify the proposed rule on adoption. All comments should refer to Project Number 55948.
The commission also invites comments specifically on the following question:
Should the rule define "wholesale market design change," and if so, how should it be defined?
Each set of comments should include a standalone executive summary as the last page of the filing. This executive summary must be clearly labeled with the submitting entity's name and should include a bulleted list covering each substantive recommendation made in the comments.
Statutory Authority
The amendment is proposed under Public Utility Regulatory Act (PURA) §14.001, which grants the commission the general power to regulate and supervise the business of each public utility within its jurisdiction and to do anything specifically designated or implied by this title that is necessary and convenient to the exercise of that power and jurisdiction; §14.002, which authorizes the commission to adopt and enforce rules reasonably required in the exercise of its powers and jurisdiction; and §15.023, which authorizes the commission and a person to enter into a voluntary mitigation plan relating to a violation of PURA §39.157.
Cross Reference to Statute: Public Utility Regulatory Act §§14.001; 14.002; and 15.023.
§25.504.Wholesale Market Power in the Electric Reliability Council of Texas Power Region.
(a) - (d) (No change.)
(e) Voluntary mitigation plan. Any generation entity
may submit to the commission a mitigation plan relating to [for ensuring] compliance with §25.503(g)(7) of this title
or with the Public Utility Regulatory Act §39.157(a). Adherence
to a commission-approved voluntary mitigation plan must be considered
in a proceeding to determine whether the generation entity violated
PURA §39.157 or §25.503(g)(7) of this title and, if so,
the amount of the administrative penalty to be assessed for the violation.
[Any plan that is submitted may be revised, with the agreement
of the market participant, and approved or rejected by the commission.
Adherence to a plan approved by the commission constitutes an absolute
defense against an allegation of market power abuse with respect to
behaviors addressed by the plan. Failure to adhere to a plan approved
by the commission does not, of itself constitute a violation of §25.503(g)(7)
of this title, but may be treated in the same manner as any other
violation of a commission order.]
(1) The commission will approve the mitigation plan only if it finds that the plan is in the public interest.
(2) A generation entity or commission staff may apply to amend or terminate a voluntary mitigation plan that applies to the generation entity.
(3) The parties to a proceeding related to the approval or amendment of a voluntary mitigation plan are limited to the generation entity applying for the mitigation plan, commission staff, and the independent market monitor.
(4) The commission, on its own motion, may terminate, in whole or in part, a voluntary mitigation plan approved under this subsection. The executive director or the executive director's designee may also terminate a voluntary mitigation plan, in whole or in part, under the following conditions:
(A) The executive director or the executive director's designee must determine that continuation of the plan is no longer in the public interest.
(B) The executive director or the executive director's designee must provide notice of the termination to the generation entity with an approved voluntary mitigation plan at least three working days prior to the effective date of the termination.
(C) The commission must affirm or set aside the executive director or the executive director's designee's termination of a voluntary mitigation plan as soon as practicable after the effective date of the termination.
(f) Review of voluntary mitigation plans.
(1) The commission will review each mitigation plan adopted under subsection (e) of this section to determine whether the plan remains in the public interest at least once every two years and not later than 90 days after the implementation date of a wholesale market design change. Commission staff, in consultation with the independent market monitor, will determine when a wholesale market design change requiring review under this paragraph has occurred.
(2) At least 30 days prior to a deadline established by paragraph (1) of this subsection, commission staff must provide a recommendation on whether each voluntary mitigation plan remains in the public interest. As part of its recommendation, for each voluntary mitigation plan adopted prior to September 1, 2023, commission staff must address whether the plan complies with PURA §15.023(f) and this section.
(3) If the commission determines that all or a part of the plan is no longer in the public interest, the commission will terminate any part of the plan that it determines is no longer in the public interest. The generation entity may propose an amended plan for the commission's consideration.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on January 19, 2024.
TRD-202400201
Adriana Gonzales
Rules Coordinator
Public Utility Commission of Texas
Earliest possible date of adoption: March 3, 2024
For further information, please call: (512) 936-7322