PUC Recommends $7.5M in Fines for Power Plants That Failed to File Winterization Reports

Generators receiving violations have 20 days to respond and request a hearing

NBC 5 Investigates has uncovered new information showing, in recent years, many Texas power plants that were spot-checked by ERCOT did not meet all of the power grid manager’s recommendations to guard against winter weather

The Public Utility Commission of Texas is recommending $7.5 million in fines against eight power generation companies who failed to file winter weather readiness reports by the Dec. 1 deadline.

The PUCT said out of 850 generation facilities statewide, 13 power plants owned by eight companies missed the deadline to file winter weather readiness reports.

Based on requirements from the Texas Legislature in SB3, the commission adopted in October a new rule requiring power generators and electric transmission companies to winterize and prepare for extreme weather before this winter season. The regulation comes after an extreme winter storm in February covered much of the state in snow and ice and knocked out power to millions for several days.

The commission said in a statement Wednesday that failure to file winterization reports on time does not indicate whether or not the plants have taken the steps needed to prepare for extreme weather and that planned inspections by ERCOT will verify their readiness.

Cooke Solar, Bull Creek Wind, Cotton Plains Wind, Lamesa Solar, Midway Solar, OCI Alamo, Shell Oil Company and Texas Big Spring LP together face more than $7.6 million dollars in fines.

The largest single penalty levied is a $2,375,000 fine recommended against Shell Oil Company, which the PUC claims failed to file winter weather preparedness emergency plants for four generating units the company operates.

In a statement to NBC 5 Wednesday, spokesperson Natalie Gunnell emailed "Shell’s generation assets have weatherization plans in place and are prepared to operate in the event of extreme weather.  We recognize the importance of clearly documenting weatherization plans for generation assets in ERCOT, including by completing the required winter weather readiness report. Each of our assets referenced in the PUC document has such a plan and has implemented the weatherization standards described in the PUC’s Weather Emergency Preparedness Rule. Shell takes its regulatory obligations seriously and will be actively working with the PUC and ERCOT to ensure the appropriate winter weather readiness report is submitted."

Cat Strumlauf with Apex Clean Energy, Inc. emailed NBC 5 the following statement: “As the asset managers of Cotton Plains Wind I, LLC, we aware of the Commission’s Notice of Violation for the project. We believe there have been some administrative misunderstandings, and we are working with the Commission to resolve the matter.”

During a news conference on Wednesday morning, PUCT Chairman Peter Lake and ERCOT interim CEO Brad Jones said inspections conducted by ERCOT teams will be taking place at more than 800 facilities statewide through Dec. 29.

Peter Lake, chairman of the PUC, and Brad Jones, interim CEO of ERCOT, held a joint news conference Wednesday morning to update Texans on the state's efforts to improve grid reliability for the winter.

Lake and Jones both assured Texans that despite concerns about the readiness of the Texas power grid's ability to handle extreme weather, the lights would stay on in Texas this winter and that the grid was stronger and more reliable than ever.

“Texans expect the power plants in our state to be better prepared for winter weather,” said PUC Executive Director Thomas Gleeson. “The governor and legislature provided us the tools to improve the stability of our grid and our commissioners have been abundantly clear that they expect generation entities to get ready for this winter. The PUCT cannot tolerate the failure of these companies to even file their readiness reports.”

Gleeson added, “We are recommending stiff administrative penalties against each of these entities. The governor, legislature and the commission have consistently told PUC staff that they expect compliance with our new rules and that we must be swift and meaningful with our enforcement action. Today’s actions demonstrate just how seriously this agency takes its job to improve the reliability of the grid.”

Lake said Wednesday the PUC recently increased penalties for violations of winterization standards of up to $1 million per day, per incident.

Entities receiving violations have 20 days to respond to the notice of violation and can request a hearing.

The 13 facilities in question, according to the PUCT, could generate 801 megawatts of electricity -- less than 1% of the state's installed capacity of 120,000 megawatts.

NBC 5's Lili Zheng contributed to this report.

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