November 27, 2013

Luminant will pay $750,000 to settle PUC charges

The case stems from the February 2011 cold snap that brought rotating blackouts after numerous power generators failed.

Dallas-based Luminant, the state's largest electricity generator, has agreed to pay $750,000 to settle regulators' complaints that it failed to meet its obligations during a February 2011 cold snap that produced rotating blackouts.

About 8,000 megawatts of generation were lost around the state by various suppliers as exceptionally low temperatures and wind chill factors affected power plants.

In May 2012, the staff of the Public Utility Commission of Texas recommended fining Luminant for its performance on Feb. 2, 2011, saying five of 10 generators didn't comply with instructions from the state's largest power grid to bring electricity online. That failure meant the Electric Reliability Council of Texas “did not receive capacity resources it needed,” the notice of violation said.

The company admitted no violations in its settlement, which was dated Tuesday. In that settlement, filed with the PUC, Luminant argued that the failure of units to start “were the result of equipment failures beyond its reasonable control.”

PUC spokesman Terry Hadley said there have been “other enforcement cases for that event,” but Luminant's settlement is by far the largest related to the 2011 freeze. Asked if there were still active investigations of operators’ performance during that time, Hadley said the PUC does not disclose enforcement actions until a notice of violation is filed.

In a statement, Luminant spokesman Brad Watson said: “225 generation resources in ERCOT, more than 40 percent of the total generation, experienced a trip, failed start” or didn’t put out as much power as it should have during the freeze.

“Since 2011, Luminant has joined other generators, electric transmission firms and state agencies to take measures to better prepare for future extreme weather,” he said. “With this settlement, Luminant resolves all alleged violations of ERCOT protocols and PUC rules from the cold weather event in 2011.”

Cyrus Reed, the Sierra Club’s conservation director in Texas and an ERCOT member, said, “Hopefully, this rather modest fine will send a message to Luminant and other coal and gas generators that when they are paid money by ERCOT to be available in times of emergency — such as the freeze of February 2011 — they must be available.”

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