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ENGIE Files Complaint Against ERCOT '

March 22,2022



ENGIE Energy Marketing NA, Inc. ('ENGIE') and Viridity Energy Solutions, Inc. ('Viridity') (collectively, 'Complainants'), pursuant to 16 TEX. ADMIN. CODE ('TAC') § 22.251, filed at the Texas PUC a complaint and appeal against the Electric Reliability Council of Texas, Inc. ('ERCOT') (herein after, the "Complaint") for what complainants alleged was, "failing to compensate or credit ancillary services provided during the Energy Emergency Alert Level 3 ('EEA3') event caused by Winter Storm Uri."

Complainants alleged, "Viridity is a Qualified Scheduling Entity ('QSE') that represents Load Resources that ERCOT called upon to provide 78 MW of RRS from February 15-19, 2022, including 27 MW of RRS subject to a trade with ENGIE. Viridity schedules the RRS obligations on behalf of its Load Resources. The 27 MW of RRS at issue was self-arranged by ENGIE through Viridity as the QSE and BASA Resources, Inc. ('BASA') as the owner of the designated Load Resources providing the RRS. The Load Resources were deployed, as instructed by ERCOT, for the entirety of the five-day EEA3 event."

Complainants alleged, "ERCOT failed to credit or compensate for RRS that was provided on February 16 to 19 in violation of PURA and the Public Utility Commission of Texas ('PUCT' or 'Commission') Rules requiring that ancillary services such as RRS be reasonably priced and properly accounted for. ERCOT has calculated ENGIE' s portion of the replacement value of the RRS as at least $47.7 million, yet ERCOT has neither compensated nor credited anything. Viridity estimates the market value of the 78 MW of RRS provided during the affected dates ranges from $67.4 million to $140.55 million based on the verifiable Day-Ahead Market clearing prices for RRS."

Complainants allege that ERCOT has denied the compensation because ERCOT alleges that the RRS was not properly scheduled, and that as a result ERCOT purchased additional replacement RRS.

Complainants allege, "With respect to scheduling, ERCOT takes the position that after it instructed the Load Resources to deploy and remain offline, (1) the 27 MW of RRS-NC trade was no longer scheduled to ENGIE; (2) the 78 MW of Load Resources that remained deployed per ERCOT's instruction were not offered in subsequent Day Ahead Markets as available for dispatch; and (3) the Current Operating Plans reflected a resource status of 'unavailable' (OUTL), instead of available for dispatch (i.e. ONRL). In other words, ERCOT's reading of its Protocols necessarily assumes the inclusion of language, which is absent from the Protocols, requiring RRS from Load Resources to be offered or scheduled in each subsequent Day Ahead Market, even if it is unavailable due to a previous and ongoing deployment instruction to remain offline. ERCOT also would require the Current Operating Plan to falsely represent that the unit is 'available for dispatch' when it has already been dispatched and is thus not available for further dispatch."

Complainants allege, "ERCOT's reading of its Protocols conflicts with Commission Rules that '[a] market participant must not offer reliability products to the market that cannot or will not be provided if selected.' In order to be available for dispatch under the Protocols, a 'Load Resource must be loaded and capable of unloading the scheduled amount of RRS within ten minutes of instruction by ERCOT.' Thus, ERCOT's interpretation of its Protocols regarding offering and scheduling the RRS would require market participants to engage in activities prohibited by Commission Rules and contrary to ERCOT's Protocols for reliability. The actions ERCOT claims should have been taken would have been unlawful."

Complainants allege, "With respect to ERCOT's alleged purchase of replacement RRS on ENGIE's behalf, ERCOT's own records show that no replacement RRS was available for purchase during the EEA3 event ... In reality, ERCOT simply charged ENGIE for a portion of the RRS that ERCOT had previously acquired to meet the RRS obligations of other QSEs."

ENGIE and Viridity request that the Commission direct ERCOT to credit the RRS services ERCOT requested and utilized, that were deployed during Winter Storm Uri and the EEA3 event that followed, and reverse any charges assessed against ENGIE for phantom RRS that ERCOT did not acquire.

ERCOT had previously denied the claims of the Complainants under alternative dispute resolution

In a report on the Engie ADR resolution ERCOT stated, "Engie’s trade with Viridity was not properly reported for its RRS obligation on February 16 because, though Engie reported the obligation for that date as self-arranged and submitted the trade, Viridity did not submit a matching trade. As a result, the trade was invalid and could not be used by ERCOT. Because there was no valid A/S trade submitted, the obligation to provide RRS remained with Engie and was not transferred to Viridity. On the date before each of the other applicable operating days, Engie canceled its report of self-arrangement and canceled the A/S trades it had submitted for the February 17-19 time-period. Engie therefore failed to properly report that its RRS obligations were self-arranged and failed to submit trades for February 17-19. Given the circumstances, ERCOT procured RRS on Engie’s behalf in the DAM for the February 17-19 time-period."

In a report on the ADR resolution ERCOT stated, "Engie asserts that ERCOT received the benefit of Engie’s RRS obligation because Viridity’s Load Resources were deployed on February 15 and remained deployed until February 19, effectively providing the RRS. However, this argument ignores the fact that Engie’s actions affected the market and settlement of other QSEs regarding ERCOT’s RRS procurement for that time-period. If Engie’s ADR were granted, it would result in increased costs being invoiced to all other QSEs for whom ERCOT procured RRS in the DAM to make up for Engie’s share of the total RRS costs for February 17-19. Further, the information submitted to ERCOT during the deployment contradicts the characterization that Viridity’s Load Resources were subject to an RRS deployment during the February 16-19 time-period. After February 16 at 12:01, Viridity did not show any RRS obligation in the real-time telemetry submitted on behalf of any of its Load Resources. The COPs submitted by Viridity during that time-period also did not reflect that the Load Resources were subject to RRS obligations as required by ERCOT Protocols."

Complainants alleged that their actions were undertaken pursuant to a discussion with an ERCOT control room operator after they had asked for guidance

In a report on the ADR resolution ERCOT stated, "Engie’s allegations regarding phone communications with the ERCOT control room do not provide a valid basis for Engie’s claim. It is not the ERCOT control room operator’s responsibility to direct Market Participants on how to manage their offers or trades during an Emergency Condition. Engie was responsible for understanding how to properly document its RRS trade with Viridity in MMS. The DAM and ERCOT’s systems were functioning properly – the market was not suspended or restarted during the dates at issue. There were other QSEs representing Load Resources who were similarly deployed on February 15 for RRS and required to remain off-line during February 16-19 who properly submitted offers into DAM for RRS and were compensated accordingly for those dates. Further, the relevant control room recordings do not reflect ERCOT instructing Engie to cancel its self-arrangement report or that it should not submit its trades with Viridity into MMS. Even if ERCOT had incorrectly advised Engie on how to report self-arrangement or submit its trades with Viridity, that conversation with the ERCOT control room would not relieve Engie of its RRS obligations."

See the links below for more details

Complaint

ERCOT ADR report, Engie

ERCOT ADR report, Viridity

Docket 53377









































































































































































































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