| (a) Scope. This section addresses enforcement actions
related to administrative penalties or disgorgement of excess revenues
only and does not apply to any other enforcement actions that may
be undertaken by the commission or the commission staff.
(b) Definitions. The following words and terms, when
used in this section, have the following meanings unless the context
indicates otherwise:
(1) Affected wholesale electric market participant
-- An entity, including a retail electric provider (REP), municipally
owned utility (MOU), or electric cooperative, that sells energy to
retail customers and served load during the period of the violation.
(2) Excess revenue -- As defined in §25.503 of
this title (relating to Oversight of Wholesale Market Participants).
(3) Executive director -- The executive director of
the commission or the executive director's designee.
(4) Person -- Includes a natural person, partnership
of two or more persons having a joint or common interest, mutual or
cooperative association, and corporation.
(5) Violation -- Any activity or conduct prohibited
by the Public Utility Regulatory Act (PURA), the Texas Water Code
(TWC), commission rule, or commission order.
(6) Continuing violation -- Except for a violation
of PURA chapter 17, 55, or 64, and commission rules or commission
orders adopted or issued under those chapters, any instance in which
the person alleged to have committed a violation attests that a violation
has been remedied and was accidental or inadvertent and subsequent
investigation reveals that the violation has not been remedied or
was not accidental or inadvertent.
(c) Amount of administrative penalty for violations
of PURA or a rule or order adopted under PURA.
(1) Each day a violation continues or occurs is a separate
violation for which an administrative penalty can be levied, regardless
of the status of any administrative procedures that are initiated
under this subsection.
(2) The administrative penalty for each separate violation
of PURA §35.0021, PURA §38.075, or a commission rule or
commission order adopted under PURA §35.0021 or PURA §38.075
will be in an amount not to exceed $1,000,000 per violation per day.
For all other violations, the administrative penalty for each separate
violation will be in an amount not to exceed $25,000 per violation
per day. An administrative penalty in an amount that exceeds $5,000
may be assessed only if the violation is included in the highest class
of violations in the classification system.
(3) The amount of the administrative penalty must be
based on:
(A) the seriousness of the violation, including the
nature, circumstances, extent, and gravity of any prohibited acts,
and the hazard or potential hazard created to the health, safety,
or economic welfare of the public;
(B) the economic harm to property or the environment
caused by the violation;
(C) the history of previous violations;
(D) the amount necessary to deter future violations;
(E) efforts to correct the violation; and
(F) any other matter that justice may require, including,
but not limited to, the respondent's timely compliance with requests
for information, completeness of responses, and the manner in which
the respondent has cooperated with the commission during the investigation
of the alleged violation.
(d) Amount of administrative penalty for violations
of the TWC or a rule or order adopted under chapter 13 of the TWC.
(1) Each day a violation continues may be considered
a separate violation for which an administrative penalty can be levied,
regardless of the status of any administrative procedures that are
initiated under this subsection.
(2) The administrative penalty for each separate violation
may be in an amount not to exceed $5,000 per day.
(3) The amount of the penalty must be based on:
(A) the nature, circumstances, extent, duration, and
gravity of the prohibited acts or omissions;
(B) the degree of culpability, including whether the
violation was attributable to mechanical or electrical failures and
whether the violation could have been reasonably anticipated and avoided;
(C) the demonstrated good faith, including actions
taken by the person, affiliated interest, or entity to correct the
cause of the violation;
(D) any economic benefit gained through the violations;
(E) the amount necessary to deter future violations;
and
(F) any other matters that justice requires.
(e) Initiation of investigation. Upon receiving an
allegation of a violation or of a continuing violation, the executive
director will determine whether an investigation should be initiated.
(f) Report of violation or continuing violation. If,
based on the investigation undertaken in accordance with subsection
(e) of this section, the executive director determines that a violation
or a continuing violation has occurred, the executive director may
issue a report to the commission.
(1) Contents of the report. The report must state the
facts on which the determination is based and a recommendation on
the imposition of an administrative penalty, including a recommendation
on the amount of the administrative penalty and, if applicable under §25.503
of this title, a recommendation that excess revenue be disgorged.
(2) Notice of report.
(A) Within 14 days after the report is issued, the
executive director will give written notice of the report to the person
who is alleged to have committed the violation or continuing violation
which is the subject of the report. The notice may be given by regular
or certified mail.
(B) For violations of the TWC or a rule or order adopted
under chapter 13 of the TWC, within ten days after the report is issued,
the executive director will, by certified mail, return receipt requested,
give written notice of the report to the person who is alleged to
have committed the violation or continuing violation which is the
subject of the report.
(C) The notice must include:
(i) a brief summary of the alleged violation or continuing
violation;
(ii) a statement of the amount of the recommended administrative
penalty;
(iii) a statement recommending disgorgement of excess
revenue, if applicable, under §25.503 of this title;
(iv) a statement that the person who is alleged to
have committed the violation or continuing violation has a right to
a hearing on the occurrence of the violation or continuing violation,
the amount of the administrative penalty, or both the occurrence of
the violation or continuing violation and the amount of the administrative
penalty;
(v) a copy of the report issued to the commission under
this subsection; and
(vi) a copy of this section, §22.246 of this title
(relating to Administrative Penalties).
(D) If the commission sends written notice to a person
by mail addressed to the person's mailing address as maintained in
the commission's records, the person is deemed to have received notice:
(i) on the fifth day after the date that the commission
sent the written notice, for notice sent by regular mail; or
(ii) on the date the written notice is received or
delivery is refused, for notice sent by certified mail.
(g) Options for response to notice of violation or
continuing violation.
(1) Opportunity to remedy.
(A) This paragraph does not apply to a violation of
PURA chapters 17, 55, or 64; PURA §35.0021 or §38.075; or
chapter 13 of the TWC; or of a commission rule or commission order
adopted or issued under those chapters or sections.
(B) Within 40 days of the date of receipt of a notice
of violation set out in subsection (f)(2) of this section, the person
against whom the administrative penalty or disgorgement may be assessed
may file with the commission proof that the alleged violation has
been remedied and that the alleged violation was accidental or inadvertent.
A person who claims to have remedied an alleged violation has the
burden of proving to the commission both that an alleged violation
was remedied before the 31st day after the date the person received
the report of violation and that the alleged violation was accidental
or inadvertent. Proof that an alleged violation has been remedied
and that the alleged violation was accidental or inadvertent must
be evidenced in writing, under oath, and supported by necessary documentation.
(C) If the executive director determines that the alleged
violation has been remedied, was remedied within 30 days, and that
the alleged violation was accidental or inadvertent, no administrative
penalty will be assessed against the person who is alleged to have
committed the violation.
Cont'd... |
