Commission Findings. The Commission must make findings that demand management activities are necessary to help assure continued compliance with Article III of the Colorado River Compact;
Commission Findings. 243. We find that the ERCOT bylaws and the representations made in Exhibit B of the TRE Delegation Agreement satisfy the governance requirements of FPA section 215 and the pro forma Exhibit B Governance Criteria. First, we find that TRE will be governed by a combination independent and balanced stakeholder board. The board will be sufficiently independent because it will be responsible for managing its own budget, hiring and managing its own staff and consultants, and investigating compliance with, and enforcement of, reliability standards in the ERCOT region. The Texas Commission, moreover, will conduct all hearings on complaints, allegations of violations, and non- compliance reports and will make recommendations as to the appropriate disposition of these matters.133 The chairman of the Texas Commission will also occupy a seat on the ERCOT board. As such, we find that there will be a sufficient separation of functions between TRE and the ISO function of ERCOT.134 133 ERCOT bylaws at section 7.2. 134 In our analysis of the SPP Delegation Agreement, below, we reach a different conclusion regarding the extent to which the SPP Regional Entity, as proposed, will operate independently of the SPP RTO. However, we find that the circumstances presented by the proposed TRE/ERCOT arrangement can be distinguished, particularly given the involvement of the Texas Commission in TRE’s governance. 244. We also find that the ERCOT board will be sufficiently independent because it will be comprised of directors chosen from all industry segments, with no two sectors able to control a vote. No single sector will be able to veto a measure, given ERCOT’s quorum and supermajority voting requirements. As such, XXXXX’s board composition and voting protocols are designed to ensure that TRE will be governed by an appropriate balance of stakeholder interests. 245. Finally, we clarify that the ERCOT bylaws are “rules,” under our regulations, which are subject to NERC approval and, if approved by NERC, Commission approval.135
Commission Findings. 22. We accept NERC’s proposal to include, in Exhibit C of the pro forma Delegation Agreement, 34 Common Attributes that govern the development of reliability standards. These Common Attributes are generally consistent with NERC’s procedures for the development of reliability standards that the Commission has approved in the ERO Certification Order.27 We also find that these Common Attributes will serve as a useful benchmark in identifying the procedural elements necessary to ensure an open and fair process capable of producing reliability standards that are both technically sound and able to achieve a valuable reliability goal. We also agree that it will be appropriate, consistent with the flexibility afforded by FPA section 215, to consider, on a case-by-case basis (as we do below), the specific voting procedures applicable to this standards development process.
Commission Findings. 41. We find that NERC’s proposed compliance audit procedures satisfy the requirements of the ERO Certification Order. As discussed below, we also identify modifications to be addressed by NERC. As required by the ERO Certification Order, we find that NERC has included the necessary language in its audit procedures, at section 3.1.5, stating that no restrictions will be placed on the participation of Commission Staff in a compliance audit. We also find that NERC’s compliance audit procedures are generally consistent with GAO procedures.37 However, we direct NERC to review 36 The relevant language provides that “in the event the audit report identifies Alleged Violations, the final audit report, or pertinent part thereof, shall not be released to the public until after such Alleged Violations have been addressed and finally determined by the Compliance Enforcement Authority. . .” (emphasis added). GSOC asserts that the italicized phrase should be deleted. 37 Specifically, NERC’s audit procedures are based on the following GAO procedures: ¶ 3.03 through ¶ 3.32 (independence); ¶ 3.33 through ¶ 3.38 (professional judgment); ¶ 3.39 through 3.42 (competence); ¶ 3.45 through ¶ 3.48 (continuing professional education); ¶ 3.49 through ¶ 3.56 (quality control and assurance), and additional provisions addressing reporting and field work procedures. annually whether any changes to the GAO Standards have occurred and to address in its annual audit plan whether any changes in its audit procedures are appropriate.
Commission Findings. 65. We accept sections 3.4 and 5 of the Uniform Compliance Program. For the reasons discussed below, we find that NERC’s procedures generally comply with the requirements of the ERO Certification Order. We also identify modifications to be addressed by NERC.
Commission Findings. 86. We accept sections 6 and 7 of the Uniform Compliance Program. We also identify modifications to be addressed by NERC. The ERO Certification Order held that remedial actions would be required to: (i) achieve prospective compliance with reliability standards; and (ii) reduce the risk to bulk-power system reliability if actions that appear to be in violation of reliability standards are not corrected.62 Sections 6 and 7 of the Uniform Compliance Program generally satisfy these objectives.
Commission Findings. 104. We accept section 5.4 of the Uniform Compliance Program. We also identify modifications to be addressed by NERC. We find that, in general, section 5.4 sets out procedures that will encourage settlements when appropriate, consistent with the requirements of the ERO Certification Order. However, the time period specified in section 5.4 during which settlement may be pursued warrants revision to include the period prior to the issuance of a notice of alleged violation. Accordingly, we direct NERC to modify section 5.4 to state that settlement negotiations may occur at any time until a notice of penalty is filed with the Commission or an applicable governmental authority.
Commission Findings. 116. We find that section 3.8 sets out procedures that will promote the fair and judicious processing of complaints, consistent with the requirements of the ERO Certification Order. Accordingly, we accept section 3.8 of the Uniform Compliance Program. We also identify modifications to be addressed by NERC. First, where NERC is required to review a complaint and conduct an investigation, due to its being “related to Regional Entities,” we construe the scope of that disqualification to include the Regional Entity and any of its affiliates, divisions, committees or subordinate structures. 117. In addition, the use of the term “Alleged Violation,” in section 3.8.2, in reference to the allegations made in an anonymous complainant is inconsistent with NERC’s
Commission Findings. 125. We accept sections 3.4 and 9.3 of the Uniform Compliance Program. We find that, in general, sections 3.4 and 9.3 set forth procedures that will protect confidentiality, consistent with the requirements of the ERO Certification Order. However, we also identify modifications to be addressed by NERC.
Commission Findings. 132. We accept section 5.1(iv) of the Uniform Compliance Program, without revision. GSOC’s recommendation that notices of an alleged violation should be required to state whether the alleged violator saw its violation as an economic choice is unnecessary. While the ERO Certification Order required that a Regional Entity or NERC justify a penalty determination, in part, on these grounds, a section 5.1(iv) notice may not be the appropriate forum for doing so. A notice of alleged violation, rather, is a notice that the compliance enforcement authority concludes that evidence exists that an entity violated one or more requirements of a reliability standard, not a determination of penalty. Such a notice, then, need not address this factor.
