ERCOT’S COMPLIANCE ASSESSMENT and

ENFORCEMENT PROGRAMMarch 23, 2005

Compliance ProgramOverview

Protocols & Guides

NERC Standards

Audits / Investigations Data Gathering &

Reporting

Functional Model

Enforcement

Compliance Program Overview

• ERCOT Compliance does not make the rules!

• Compliance enforces rules as set forth by stakeholders and market participants:– ERCOT Protocols– ERCOT Operating Guides

• AND through the NERC Standards as established by the electric industry

Compliance AssessmentProcess

Assessment Processes

• Periodic Data Collection and Monitoring

• Self Certification & Audits – Most Common, Eventually will Combine into Certification Activity

• Investigations Triggered by Events – ERCOT’s investigation process

Compliance Assessment Process

• ERCOT Compliance currently has 28 Compliance Monitoring & Measurement Requirements

• Templates have been developed for 11 of those requirements

• 17 additional templates remain to be developed• NERC has 45 additional Compliance templates• Compliance is required regardless of whether or

not a template exists

Levels of Non-Compliance

Consequences of Non-ComplianceNERC

• Level assessed based on violation severity

• Recurring violations result in higher levels

• Simulated $$$$ penalties

• Letters sent to higher levels of mgmt

• Posting at NERC’s website

• Additional reserves (RRS) for DCS fails

• Review by NERC Board

 

Occurrence Within A Rolling 12 – Month Period Level Non-Compliance

 

1st

 

2nd

 

3rd 4th and Greater 

1 

(1) Letter to Mgr

 

(1)$1,000 or$1/MW

$2,000 or$2/MW

 

2 

 

(1)$1,000 or$1/MW

$2,000 or$2/MW

$4,000 or$4/MW

 

3 

$1,000 or$1/MW

$2,000 or$2/MW

$4,000 or$4/MW

$6,000 or$6/MW

 

4 

$2,000 or$2/MW

$4,000 or$4/MW

$6,000 or$6/MW

$10000 or$10/MW

NERC Proposed Penalty Matrix

Consequences of Non-ComplianceERCOT

• Letters of Non-Compliance

• Posting on ERCOT’s website

• PUCT Notified

• Disqualification for some A/S

• ERCOT does not have the authority to levy fines at this time!

• Corrective actions need to be taken – or explanation of circumstances provided – for non-compliance

• Corrective Action plans are tracked to completion

• Failure to complete Corrective Action plans will result in further posting and escalation

• Late delivery of data or other information will be escalated in steps, finally resulting in non-compliance

Lateness and Corrective Action Plans

Where can more information

be found?

ERCOT’s Compliance Homepage

• Complete links to NERC & ERCOT Templates • Compliance Processes• Notices and Reports• Links to NERC items

“www.ercot.com/nerccompliance/compliance.htm”

QuestionsQuestions

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