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or official interpretation of the requirement, or honor the commitment.
(5) The commission staff may request information from
a market participant concerning a notification of failure to comply
with a Protocol requirement or official interpretation of a requirement,
or honor a formal commitment to ERCOT. The market participant must
provide a response that is detailed and reasonably complete, explaining
the circumstances surrounding the alleged failure, and must provide
documents and other materials relating to such alleged failure to
comply. The response must be submitted to the commission staff within
five business days of a written request for information, unless commission
staff agrees to an extension.
(6) A market participant's bids of energy and ancillary
services must be from resources that are available and capable of
performing, and must be feasible within the limits of the operating
characteristics indicated in the resource plan, as defined in the
Protocols, and consistent with the applicable ramp rate, as specified
in the Protocols.
(7) All statements, data and information provided by
a market participant to market publications and publishers of surveys
and market indices for the computation of an industry price index
must be true, accurate, reasonably complete, and must be consistent
with the market participant's activities, subject to generally accepted
standards of confidentiality and industry standards. Market participants
must exercise due diligence to prevent the release of materially inaccurate
or misleading information.
(8) A market entity has an obligation to provide accurate
and factual information and must not submit false or misleading information,
or omit material information, in any communication with ERCOT or with
the commission. Market entities must exercise due diligence to ensure
adherence to this provision throughout the entity.
(9) A market participant must comply with all reporting
requirements governing the availability and maintenance of a generating
unit or transmission facility, including outage scheduling reporting
requirements. A market participant must immediately notify ERCOT when
capacity changes or resource limitations occur that materially affect
the availability of a unit or facility, the anticipated operation
of its resources, or the ability to comply with ERCOT dispatch instructions.
(10) A market participant must comply with requests
for information or data by ERCOT as specified by the Protocols or
ERCOT instructions within the time specified by ERCOT instructions,
or such other time agreed to by ERCOT and the market participant.
(11) When a Protocol provision or its applicability
is unclear, or when a situation arises that is not contemplated under
the Protocols, a market entity seeking clarification of the Protocols
must use the Nodal Protocol Revision Request (NPRR) process provided
in the Protocols. If the NPRR process is impractical or inappropriate
under the circumstances, the market entity may use the process for
requesting formal Protocol clarifications or interpretations described
in subsection (i) of this section. This provision is not intended
to discourage day to day informal communication between market participants
and ERCOT staff.
(12) A market participant operating in the ERCOT markets
or a member of the ERCOT staff who identifies a provision in the ERCOT
procedures that produces an outcome inconsistent with the efficient
and reliable operation of the ERCOT-administered markets must call
the provision to the attention of ERCOT staff and the appropriate
ERCOT subcommittee. All market participants must cooperate with the
ERCOT subcommittees, ERCOT staff, and the commission staff to develop
Protocols that are clear and consistent.
(13) A market participant must establish and document
internal procedures that instruct its affected personnel on how to
implement ERCOT procedures according to the standards delineated in
this section. Each market participant must establish clear lines of
accountability for its market practices.
(g) Prohibited activities. Any act or practice of a
market participant that materially and adversely affects the reliability
of the regional electric network or the proper accounting for the
production and delivery of electricity among market participants is
considered a "prohibited activity." The term "prohibited activity"
in this subsection excludes acts or practices expressly allowed by
the Protocols or by official interpretations of the Protocols and
acts or practices conducted in compliance with express directions
from ERCOT or commission rule or order or other legal authority. The
term "prohibited activity" includes, but is not limited to, the following
acts and practices that have been found to cause prices that are not
reflective of competitive market forces or to adversely affect the
reliability of the electric network:
(1) A market participant must not schedule, operate,
or dispatch its generating units in a way that creates artificial
congestion.
(2) A market participant must not execute pre-arranged
offsetting trades of the same product among the same parties, or through
third party arrangements, which involve no economic risk and no material
net change in beneficial ownership.
(3) A market participant must not offer reliability
products to the market that cannot or will not be provided if selected.
(4) A market participant must not conduct trades that
result in a misrepresentation of the financial condition of the organization.
(5) A market participant must not engage in fraudulent
behavior related to its participation in the wholesale market.
(6) A market participant must not collude with other
market participants to manipulate the price or supply of power, allocate
territories, customers or products, or otherwise unlawfully restrain
competition. This provision should be interpreted in accordance with
federal and state antitrust statutes and judicially-developed standards
under such statutes regarding collusion.
(7) A market participant must not engage in market
power abuse. Withholding of production, whether economic withholding
or physical withholding, by a market participant who has market power,
constitutes an abuse of market power.
(h) Defenses. The term "prohibited activity" in subsection
(g) of this section excludes acts or practices that would otherwise
be included, if the market entity establishes that its conduct served
a legitimate business purpose consistent with prices set by competitive
market forces; and that it did not know, and could not reasonably
anticipate, that its actions would inflate prices, adversely affect
the reliability of the regional electric network, or adversely affect
the proper accounting for the production and delivery of electricity;
or, if applicable, that it exercised due diligence to prevent the
excluded act or practice. The defenses established in this subsection
may also be asserted in instances in which a market participant is
alleged to have violated subsection (f) of this section. A market
entity claiming an exclusion or defense under this subsection, or
any other type of affirmative defense, has the burden of proof to
establish all of the elements of such exclusion or defense.
(i) Official interpretations and clarifications regarding
the Protocols. A market entity seeking an interpretation or clarification
of the Protocols must use the NPRR process contained in the Protocols
whenever possible. If an interpretation or clarification is needed
to address an unforeseen situation and there is not sufficient time
to submit the issue to the NPRR process, a market entity may seek
an official Protocol interpretation or clarification from ERCOT in
accordance with this subsection.
(1) ERCOT must develop a process for formally addressing
requests for clarification of the Protocols submitted by market participants
or issuing official interpretations regarding the application of Protocol
provisions and requirements. ERCOT must respond to the requestor within
ten business days of ERCOT's receipt of the request for interpretation
or clarification with either an official Protocol interpretation or
a recommendation that the requestor take the request through the NPRR
process.
(2) ERCOT must designate one or more ERCOT officials
who will be authorized to receive requests for clarification from,
and issue responses to market participants, and to issue official
interpretations on behalf of ERCOT regarding the application of Protocol
provisions and requirements.
(3) The designated ERCOT official must provide a copy
of the clarification request to commission staff upon receipt. The
ERCOT official must consult with ERCOT operational or legal staff
as appropriate and with commission staff before issuing an official
Protocol clarification or interpretation.
(4) The designated ERCOT official may decide, in consultation
with the commission staff, that the language for which a clarification
is requested is ambiguous or for other reason beyond ERCOT's ability
to clarify, in which case the ERCOT official shall inform the requestor,
who may take the request through the NPRR process provided for in
the Protocols.
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