TITLE 16. ECONOMIC REGULATION

PART 2. PUBLIC UTILITY COMMISSION OF TEXAS

CHAPTER 22. PROCEDURAL RULES

SUBCHAPTER M. PROCEDURES AND FILING REQUIREMENTS IN PARTICULAR COMMISSION PROCEEDINGS

16 TAC §22.246

The Public Utility Commission of Texas (commission) adopts amendments to existing 16 Texas Administrative Code (TAC) §22.246, relating to Administrative Penalties. The commission adopts this rule with changes to the proposed rule as published in the September 3, 2021, issue of the Texas Register (46 TexReg 5517). The rule will be republished. This rule will implement an amendment to the Public Utility Regulatory Act (PURA) §15.023(b-1) enacted by the 87th Texas Legislature that establishes an administrative penalty not to exceed $1,000,000 for violations of PURA §35.0021 or §38.075, each relating to Weather Emergency Preparedness. In response to filed comments, these rules will also clarify the application of certain statutory provisions relating to the commission's penalty authority and applicable remedy periods.

The commission received comments on the proposed rule from AEP Texas Inc., CenterPoint Energy Houston Electric, LLC, Oncor Electric Delivery Company LLC, and Texas-New Mexico Power Company (collectively, the Joint ERCOT TDUs); Texas Electric Cooperatives, Inc. (TEC); Texas Competitive Power Advocates (TCPA); Texas Public Power Association (TPPA); and Lower Colorado River Authority and Lower Colorado River Authority Transmission Services Corporation (collectively, LCRA).

General Comments

Statutory Interpretation of PURA §15.023(a), §15.024(c), §35.0021(g), and §38.075(d)

PURA §15.023(a) and §15.024(c) were in effect prior to the 87th session of the Texas Legislature and will be referred to as preexisting law. PURA §35.0021 and §38.075 were both enacted by the 87th Texas Legislature and will be referred to as the weather preparedness statutes. Rules adopted and orders issued under these statutes will be referred to as weather preparedness rules and weather preparedness orders respectively.

Commission Comment

Commenters have noted, either explicitly or by implication, several conflicts between the weather preparedness statutes and preexisting law. The commission addresses the specifics of these comments throughout this order where relevant. The statutory underpinnings for the resolution of these conflicts are discussed under this General Comments heading. The weather preparedness statutes were enacted after the preexisting statutes and are more specific in their application. Accordingly, under the Code Construction Act §311.025-31.026, the weather preparedness statutes prevail in any conflicts.

The first issue involving the interaction of preexisting law and the weather preparedness statutes relates to circumstances in which the commission has authority to issue an administrative penalty for a violation of a weather preparedness statute, rule, or order.

Under PURA §15.023(a), "[t]he commission may impose an administrative penalty against a person regulated under [PURA, Title II] who violates [PURA, Title II] or a rule or order adopted under [PURA, Title II]." Notably, the weather preparedness statutes are located in PURA, Title II. Under the Code Construction Act §311.016, "may" creates discretionary authority. Therefore, under preexisting law, the commission has general discretion to impose administrative penalties for violation of a weather preparedness statute, rule, or order.

Each of the weather preparedness statutes contains an identical provision that reads "[t]he commission shall impose an administrative penalty on an entity, including a municipally owned utility or an electric cooperative, that violates a [weather preparedness rule] and does not remedy that violation within a reasonable period of time." Under the Code Construction Act, "shall" imposes a duty. Accordingly, if an entity violates a weather preparedness rule, the commission is required to impose an administrative penalty.

In comments submitted on various provisions throughout the two proposed rules, TCPA, TEC, Joint ERCOT TDUs, and LCRA each interpret the language of the weather preparedness statutes to mean that the commission cannot impose an administrative penalty against an entity that violates a weather preparedness statute, rule, or order unless the entity fails to remedy the violation within a reasonable period of time.

Commission Response

The commission disagrees that it cannot impose an administrative penalty against an entity that violates a weather preparedness requirement unless the entity fails to remedy the violation within a reasonable period of time. As the commenters point out, each of the weather preparedness statutes indicate the commission shall impose a penalty if a violation is not remedied in a reasonable period of time. However, neither of the weather preparedness statutes impose or suggest any limitation on PURA §15.023(a), which provides the commission with discretionary authority to issue a penalty for a violation of PURA, Title II or a rule or order adopted under Title II.

The interpretation that the commission is prevented from issuing an administrative penalty without first giving an entity an opportunity to remedy the violation fails on a policy level as well, as such a limitation would create a significant compliance loophole. Under such an interpretation, an entity would be incentivized to delay implementing any costly weather preparedness measure until after it was identified by the Electric Reliability Council of Texas (ERCOT) or the commission, because the regulatory risk of noncompliance would be eliminated. If the violation is discovered, the entity would be assured a reasonable period of time to remedy the violation, regardless of the circumstances surrounding the violation. If it is not discovered, potentially costly upgrades could be avoided completely. Moreover, an entity could even fail to meet the same requirement multiple times, each time relying upon a built-in cure period to address any compliance issues.

The commission adopts amended §22.246(g)(5)(C) to clarify the commission's discretionary penalty authority under preexisting law.

The next interaction of potentially conflicting statutes involves potential exceptions to the commission's discretionary penalty authority under §15.023(a). The first exception originates from the aforementioned provision of the weather preparation statutes that requires the commission to impose a penalty if a weather preparation rule is violated and not remedied in a reasonable period of time. The second comes from PURA §15.024(c), which states that "[a] penalty may not be assessed under this section if the person against whom the penalty may be assessed remedies the violation before the 31st day after the date the person receives [a formal notice of violation]. A person who claims to have remedied an alleged violation has the burden of proving to the commission that the alleged violation was remedied and was accidental or inadvertent." Under the Code Construction Act §311.016, "may not" imposes a prohibition. Therefore, the commission is prohibited from imposing a penalty for a violation of Title II or a rule or order adopted under Title II if the entity can demonstrate that the violation was accidental or inadvertent and was remedied before the 31st day after receiving notice under Subsection (b).

Commission Response

The commission modifies §22.246 to reflect two exceptions to the commission's discretionary penalty authority. First, consistent with the weather preparedness statutes, under adopted §22.246(g)(5)(C)(ii), the commission is required to issue an administrative penalty for a violation of a weather preparedness rule that was not remedied within a specified timeframe. Second, consistent with PURA §15.024(c), under adopted §22.246(g)(5)(C)(ii), the commission is prohibited from issuing an administrative penalty for a violation of a weather preparedness statute, rule, or order if the violation is remedied within a specified timeframe, and was accidental or inadvertent. In this instance, the alleged violator has the burden of proving that each of these conditions was met. Each of these exceptions to the commission's general discretionary authority is justified because under the Code Construction Act, the more specific provisions of PURA §15.024(c) and the weather preparedness statutes control over PURA §15.023(a). The commission addresses the specified timeframes below. The commission also modifies the rule to clarify that neither of the above exceptions apply to a violation that is not remediable.

The third potential conflict of laws relates to the appropriate remedy period for purposes of the exceptions to the commission's discretionary administrative authority. Under preexisting law, the general remedy period for any violation is 30 days after the receipt of a formal notice of violation. Under the weather preparedness statutes, the remedy period is a reasonable period of time. TPPA contends that these are two distinct remedy periods and argued that the commission should clarify that the two periods are different. Conversely, Joint ERCOT TDUs argue that the reasonable remedy period takes precedence over the generic 30-day remedy period, because the reasonable remedy period is specific to weather preparedness violations. Joint ERCOT TDUs further argue that a reasonable remedy period is "a fact question, dependent on the particular facts and circumstances attendant to the situation. A reasonable period of time for remedying a violation of a rule established pursuant to the Weatherization Statutes may not, therefore, be established by rule, or without any consideration of the particular facts and circumstances giving rise to a violation."

Commission Response

The commission agrees with Joint ERCOT TDUs - while acknowledging that Joint ERCOT TDUs were making this argument in support of a different ultimate position - that there is only a single, reasonability-based remedy period for violations of weather preparation requirements. Weather preparedness violations pose a serious risk to reliability of the bulk electric system, and an entity that violates these rules must remedy those violations as expediently as reasonably possible. Applying a generic remedy period, as provided by preexisting law, or two separate remedy periods, as recommended by TPPA, would lead to contradictory results and would undermine the effectiveness of the commission's statutorily mandated regulatory objectives. If, for example, the reasonable remedy period for a violation is 20 days, if an entity fails to remedy that violation within 20 days, the commission is required by the weather preparedness statutes to impose an administrative penalty. Affording that entity a second remedy period after it has received a formal notice of violation from the executive director clearly conflicts with the plain language of the weather preparedness statutes.

Under the adopted §22.246(g)(5)(C), the remedy period for both exceptions to the commission's discretionary penalty authority is a "reasonable" period of time. The commission agrees with Joint ERCOT TDUs that the weather preparedness statutes establish a remedy period that is dependent upon the particulars of the violation and, potentially, the circumstances surrounding the violation.

The final potential conflict between preexisting law and the weather preparedness statutes is the process and timing surrounding the remedy periods. Under preexisting law, the remedy period begins after the entity has received a formal notice of violation from the executive director. Under the weather preparedness statutes, the remedy period, in many cases, will begin when ERCOT provides the entity with the results of a weather preparedness inspection. This is a significant distinction, because §22.246 provides specific notice and process requirements that are not applicable to a remedy period that takes place prior to the issuance of a formal notice of violation.

Commission Response

The process surrounding the application of the period for remedying violations is determined by the applicable substantive weather preparedness rules. However, because the commission has not yet adopted its final Phase II weather preparedness rules, adopted §22.246(g)(5)(D) establishes default procedural rules surrounding remedying weather preparedness violations that supplement the other notice of violation provisions of that section. These procedural provisions mirror the preexisting process for the generic remedy period under §22.246(g)(1).

Specifically, under adopted §22.246(g)(5)(D) an entity that remedies a violation discovered during an ERCOT inspection by the deadline provided by ERCOT is deemed to have remedied that violation in a reasonable period of time. If ERCOT has not provided a deadline, the executive director will provide the entity with a written notice describing the violation and a deadline for remedying the violation. Finally, if the commission disagrees that the deadline provided by ERCOT or the executive director is reasonable, the commission will determine what the deadline should have been. The commission will use this updated deadline to determine the applicability of the exceptions to the commission's discretionary penalty authority and, if appropriate, as a factor in determining the magnitude of the administrative penalty assessed against the entity for the violation. This updated deadline does not, however, guarantee that the entity will be provided additional time to remedy the violation in the future. Accordingly, an entity should continue its remedial efforts even after it misses the deadline provided by ERCOT or the executive director.

§22.246(b)(5), Definition of violation

§22.246(b)(5) defines the term "Violation" as "[a]ny activity or conduct prohibited by PURA...commission rule, or commission order."

TCPA recommended adding a subparagraph to §22.246(b)(5) that would clarify that with regard to weather preparedness standards, a violation does not occur until after ERCOT has conducted an inspection, found a potential violation, and provided the entity with a reasonable opportunity to cure the potential violation. TCPA argued this is required by PURA §35.0021(c).

Commission Response

The commission declines to modify the definition of violation as requested by TCPA. A violation occurs when an entity fails to comply with PURA, a commission rule, or a commission order. Whether ERCOT identifies this violation in one of its inspections or the entity eventually remedies the violation has no bearing on whether a violation occurred.

The plain language of PURA §35.0021 requires ERCOT to provide an entity with a reasonable period of time to "remedy any violation" and "report to the commission any violation" related to weather emergency preparedness. (Emphasis added). At no point does it refer to "potential violations" as suggested by TCPA. Moreover, acknowledging and documenting each failure to comply as a violation is important for establishing whether an entity has a history of violations, an important consideration in determining appropriate penalty amounts in any future enforcement proceedings related to that issue under §25.246(c)(3)(C).

§22.246(c), Penalty amounts

Existing §22.246(c) outlines the maximum penalty amounts that can be assessed for violations of PURA or a rule or order adopted under PURA and provides a list of penalty factors that the commission must consider when determining what level of penalty to impose for a particular violation. Proposed §22.246(c) clarifies that for violations of PURA §35.0021 and §38.075, or a rule or order adopted under those provisions, the commission may impose a penalty of up to §1,000,000 per violation per day.

LCRA recommended the addition of a new paragraph in §22.246(c) clarifying that the commission would not assess an administrative penalty for an entity's first violation of a weather preparedness requirement if the risk posed by the violation is low or if the entity cures the violation in a reasonable period of time.

Commission Response

The commission declines to limit its ability to assess an administrative penalty for an entity's first violation of a weather preparedness rule or statute. Neither PURA §35.002 or §38.075 include any penalty exemptions for first time offenders. The commission will consider the facts and circumstances surrounding each violation in determining whether to assess an administrative penalty, including the history of previous violations and efforts made to correct the violation, as required by this subsection.

§22.246(c)(1), Separate violations

Under paragraph §22.246(c)(1), each day a violation continues is a separate violation for which an administrative penalty can be assessed.

TCPA requested that the commission insert language clarifying that an administrative penalty will not be assessed until after the entity has been provided a reasonable period of time to remedy a violation discovered in an inspection or to appeal the inspector's determination that a violation has occurred. TCPA also requested language that a violation would not be assessed if a generation resource is following the process to mothball or retire a resource.

Commission Response

The commission declines to add language to §22.246(c)(1) that a penalty will not be assessed until after the entity has been provided a reasonable amount of time to remedy any potential violation discovered in an inspection or to appeal the inspection. Remedy periods are discussed in the commission's response to general comments above. With regard to the ability of an entity to appeal the results of an ERCOT inspection before a penalty is issued, the commission, not ERCOT, retains authority to determine whether a violation has occurred, whether the violation was remedied in a reasonable amount of time, and whether the assessment of an administrative penalty is appropriate. The commission will not assess any administrative penalties without providing the entity an opportunity to request a hearing on any contested issues.

The commission also declines to specify that a violation will not be assessed if a generation resource is following the process to mothball or retire a resource as requested by TCPA. Whether a particular fact pattern constitutes a violation of the commission's weather preparedness rules or which scenarios might excuse such a violation is beyond the scope of this rulemaking.

§22.246(c)(2), Maximum penalties

Proposed paragraph §22.246(c)(2) identifies the maximum administrative penalty of $1,000,000 for violations of PURA §35.002 and §38.075 and maximum administrative penalty of $25,000 for all other violations of PURA and commission rules.

TPPA pointed out typographical errors in citations of PURA §35.002 and §38.075 in §22.246(c)(2).

Commission Response

The commission makes the recommended changes.

TEC and LCRA each recommended modifying §22.246(c)(2) to limit the imposition of penalties to "continuing violations." TEC's suggested language appears to only permit penalties for continuing violations, and the LCRA's proposed language only allows for a penalty of over $5,000 for a violation "that is a continuing violation that was not accidental or inadvertent and was not remedied within a reasonable period of time."

TCPA made general comments regarding §22.246(c)(2) requesting that the commission clarify what constitutes a "separate violation" and proper metrics for consideration of a violation of the weatherization rule to mitigate the risk of loss by a respondent facing a prospective violation.

Commission Response

TEC and LCRA misconstrue the meaning of the defined term "continuing violation." A continuing violation is not, as these parties suggest, merely an ongoing violation after parties have had an opportunity to remedy. A continuing violation is "any instance in which the person alleged to have committed a violation attests that the 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." In other words, if an entity attempts to avail itself of the provisions under §22.246(g)(1)(B) by attesting that a violation has been remedied and was accidental, but that attestation was invalid, that violation becomes a continuing violation. Under §22.246(g)(1)(E), the executive director will institute further proceedings against the entity, rather than permit the entity an opportunity to remedy the violation.

The commission adds adopted §22.246(g)(2)(D)(vii), which requires the executive director to institute further proceedings if the executive director determines a violation is a continuing violation.

§22.246(c)(3), Penalty factors

§22.246(c)(3) identifies aggravating and mitigating factors that the commission must consider when assessing a penalty for an administrative violation.

TCPA and LCRA recommended additional mitigating and aggravating factors be added to §22.246(c)(3) to inform the commission's assessment of an administrative penalty. TCPA specifically recommended the addition of whether the violation was attributable to mechanical or electrical failures, whether the violation could have been reasonably anticipated and avoided, and whether the asset owner demonstrated good faith, including preventive or corrective actions.

LCRA recommended new penalty factors that account for "risk, severity, and repeat offenses" when assessing penalties for weatherization.

Commission Response

The commission declines to implement the specific recommendations of TCPA and general recommendations of LCRA regarding the addition of new penalty factors to §22.246(c)(3). Paragraph §22.246(c)(3) is intended to mirror penalty factors the commission is required to consider when establishing its penalty classification system under PURA §15.023(c). Further, the additional factors proposed by commenters are already encompassed by §22.246(c)(3)(A), (C), (E) and (F), which specify that the amount of an administrative penalty must be based on the seriousness of the violation, history of previous violations, efforts to correct the violation, and any other matter that justice may require.

§22.246(f)(2), Notice of report

Existing §22.246(f) allows the executive director to initiate an enforcement proceeding by providing the commission a report alleging a violation by a specific entity. Subparagraph §22.246(f)(2)(A) requires the executive director to provide notice of this report to the entity alleged to have committed the violation by regular or certified mail.

TCPA, citing concerns related to increased remote work due to the pandemic, recommended that §22.246(f)(2)(A) require e-mail notice of the report from the executive director regarding the violation in addition to regular or certified mail.

Commission Response

PURA §15.024(b) requires that this notice be given by regular or certified mail and (b-1) specifies that notice is deemed to have been received on the fifth day after the commission sends written notice by mail addressed to the person's mailing address as maintained in commission records or, if sent by certified mail, on the date the written notice is received, or delivery is refused. Therefore, the commission cannot, by rule, materially alter the conditions upon which notice is deemed to have been received by imposing additional e-mail requirements. The executive director is not, however, prohibited from sending email notice in addition to notice by mail.

§22.246(g), Options for response

Subsection §22.246(g) provides a list of options for a respondent who has been issued a notice of violation or notice of continuing violation. The options consist of an opportunity to remedy the violation, pay the administrative penalty or disgorge excess revenue, or both, or request a hearing. The rule also identifies the consequences for failure to respond to a notice of violation or notice of continuing violation.

LCRA recommended the addition of a new paragraph under this subsection that would prohibit the commission from issuing an administrative penalty for violations of weather preparedness standards if a person self-reports the violation and certifies that the violation has been remedied. LCRA's proposed new paragraph would also require the self-report to submitted in writing, under oath, supported by necessary documentation, and delivered to the executive director by certified mail.

Commission Response

The commission declines to restrict its penalty authority in circumstances where an entity self-reports and corrects a violation as requested by LCRA. Such a restriction on the commission's penalty authority would create a compliance loophole that would allow an entity to strategically delay compliance without consequence. Under §22.246(c)(3), when establishing the appropriateness and magnitude of an administrative penalty, the commission will consider efforts to correct the violation and any other matter that justice may require, including the manner in which the respondent has cooperated with the commission during an investigation of the alleged violation.

TPPA and Joint ERCOT TDUs each commented that §22.246(g)(1) did not properly apply to weather preparedness violations. TPPA recommended that the commission clarify that the 31-day cure period provided by §22.246(g) was not the same as the reasonable period of time that an entity has to remedy a weather preparedness violation under the weather preparedness statutes. TPPA argued that if ERCOT did not give entities a 31-day period following an inspection, it could conflict with this procedural rule.

Joint ERCOT TDUs, on the other hand, argued that all of §22.246(g) should not apply to weather preparedness violations and instead proposed an entirely new section applicable to such violations. Joint ERCOT TDUs proposal mirrors §22.246(g) and imposes an extremely detailed regulatory structure for the commission's processing of weather preparedness violations, including timelines and specific standards for responses and mitigation plans. Joint TDUs' full proposal will not be fully detailed in this preamble.

Commission Response

The commission agrees with TPPA and Joint ERCOT TDUs that §22.246(g) does not fully align with the weather preparedness statutes with regards to the applicable remedy period. As discussed in the commission's response to General Comments above, this is primarily due to a conflict of laws between the weather preparedness statutes and preexisting law. As detailed above, the commission modifies §22.246(g)(1) to clarify that it does not apply to weather preparedness violations and adopts new §22.246(g)(5). This new paragraph clarifies the commission's penalty authority and adapts the procedural requirements of §22.246(g) to the requirements of the weather preparedness statutes. The commission declines to adopt TPPA's recommended approach for reasons discussed under General Comments. The commission declines to adopt Joint ERCOT TDU's approach, because it is unnecessarily detailed. The commission will further address the process surrounding weather preparedness violations in its Phase II weather preparedness rulemaking.

§22.246(g)(1)(C), Grace period

Under §22.246(g)(1)(C), if the executive director determines that an alleged violation was remedied within 30 days and the violation was accidental or inadvertent, no administrative penalty will be assessed.

LCRA recommended that §22.246(g)(1)(C) be amended to specify that no administrative penalty will be assessed for weather preparedness violations if the executive director determines that the violation was remedied within a reasonable period of time.

Commission Response

The commission declines to amend subparagraph §22.246(g)(1)(C) to specify that no administrative penalty will be assessed for weather preparedness violations if the executive director determines that the violation was remedied within a reasonable period of time. The commission addressed this issue of remediation in its response to general comments above.

§25.8, Classification system for violations of statutes, rules, and orders applicable to electric service providers.

§25.8(b), Classification system

Subsection 25.8(b) classifies violations of PURA and commission rules into C, B, and A class violations, in increasing order of severity and maximum assignable administrative penalty amount. The proposed rule added language to §25.8(b)(3)(A), which addresses class A violations, that a violation of PURA §35.0021, PURA §38.075. or a commission rule or commission order adopted under PURA §35.0021 or PURA §38.075, is a Class A violation and the administrative penalty will not exceed $1,000,000 per violation per day. The proposed rule further clarifies that other class A violations retain the prior maximum assignable penalty amount of $25,000 per violation per day.

TPPA, TEC, and LCRA each criticized the proposed rule's grouping of all weather preparedness violations as class A violations with a million-dollar penalty ceiling. TPPA argued that two tiers of class A violations is confusing and that establishing separate tiers for weather preparedness violations would set expectations and "provide valuable instruction to the market before any violations occur."

Each of these commenters argued that non-material violations, such as failure to file a report, should not result in million-dollar penalties. TEC and LCRA suggested that paperwork violations should be classified as class C violations, and LCRA further specified that a weather-preparedness violation should only be a class A violation if it "creates economic harm in excess of $5,000 to a person or persons, property, or the environment, or creates an economic benefit to the violator in excess of $5,000; creates a hazard or potential hazard to the health or safety of the public; or causes a risk to the reliability of a transmission or distribution system or a portion thereof."

Commission Response

The commission declines to classify "paperwork violations" as class C violations or otherwise adopt any language that would limit the commission's ability to assign significant administrative penalties for any violation of its weather preparedness rules or orders. As has been repeatedly pointed out by commenters, the weather preparedness statutes create a preparation standard, not a performance standard, and couple this standard with a million-dollar penalty ceiling. Therefore, it is clear that the commission is to utilize the increased penalty authority prior to the occurrence of any actual weather-related performance failures - not after it is too late to prevent any human suffering, loss of life, or property damage caused by those failures. Furthermore, even violations such as "paperwork violations," could materially interfere with the commission's and ERCOT's compliance regimen, which may require the inspection of hundreds of facilities and the review and evaluation of remediation plans for any instances of noncompliance identified during these inspections. Seemingly minor violations, such as missing submission deadlines or errors in those submissions, could impede the timely completion and review of inspections or otherwise interfere with the commission's and ERCOT's ability to evaluate and ensure the weather-readiness of the grid.

The commission disagrees with TPPA that having two tiers of class A violations is confusing. The language of the rule articulates, with precision, the maximum penalty associated with each type of violation.

The commission also disagrees with TPPA's argument that more nuanced penalty classifications of weather-preparedness violations would provide meaningful guidance to market participants. Establishing penalty categories for certain types of violations only provides meaningful guidance to an entity that is evaluating whether to comply with a particular rule based on the severity of the penalty for each class of infraction. The commission expects all entities to fully comply with all applicable weather-preparedness rules to ensure the reliability of the grid. The specter of significant administrative penalties is specifically meant to deter any economic calculation that might distract an entity from directing its full efforts to achieving compliance with these standards.

TPPA argued that the commission should create a separate tiering system for weatherization-related violations. TPPA noted that the "chief author" of SB 3, Senator Charles Schwertner, produced an explanatory document that clarified that it was his intent that the commission create a penalty matrix, "to ensure that the $1 million penalty cap is focus on extreme violations and not simple violations like paperwork errors."

Commission Response

The commission also declines to create a separate penalty classification system for weather-preparedness violations as requested by TPPA. The commission is not persuaded by TPPA's argument that a summary document distributed by one of the bill's authors prior to a committee hearing on the bill constitutes definitive legislative intent for how the statute should be interpreted. Moreover, the Legislature explicitly required creation of penalty classification systems in sections 6, 20, and 31 of SB 3, each addressing other issues. Had the Legislature intended the creation of a penalty classification system for electric weather-preparedness violations, it would have included a similar requirement. Finally, under PURA §15.023(d), a classification system established under PURA §15.023(c) "shall provide that a 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." Categorically limiting any type of weather-preparedness violation to $5,000 per violation per day is inappropriate, given the extremely high priority that both the commission and the Legislature places on compliance in this area.

TEC argued that a violation should only be a class A violation if it was a "continuing violation" and there had been "notice and a reasonable opportunity to cure the violation." TCPA argued that §25.8(b)(3)(A) should incorporate text reflecting that separate violations mean a company's distinct action or inaction that directly results in a violation, rather than a resource-by-resource, unit-by-unit, or other duplicative violation that results in the "stacking of penalties where a single action or inaction results in multiple units or resources failing to abide by the commission rule or commission order."

Commission Response

The commission disagrees with TEC for the reasons discussed in its response to §22.246(c)(2). and TCPA for the reasons discussed in its response to §22.246(c)(1).

All comments, including any not specifically referenced herein, were fully considered by the commission. In adopting this rule, the commission makes other minor modifications for the purpose of clarifying its intent.

These rule amendments are adopted under the following provision of PURA: §14.001, which provides the commission the general power to regulate and supervise the business of each public utility within its jurisdiction and to do anything specifically designated or implied by PURA that is necessary and convenient to the exercise of that power and jurisdiction; §14.002, which provides the commission with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction; §15.023, which establishes that the penalty for a violation of a provision of PURA §35.0021 or PURA §38.075 may be in an amount not to exceed $1,000,000 for a violation and that each day a violation continues is a separate violation for purposes of imposing a penalty.

Cross reference to statutes: PURA §§14.001, 14.002, and 15.023, 35.0021, and 38.075.

§22.246.Administrative Penalties.

(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.

(D) If the executive director determines that the alleged violation was not remedied or was not accidental or inadvertent, the executive director will make a determination as to what further proceedings are necessary.

(E) If the executive director determines that the alleged violation is a continuing violation, the executive director will institute further proceedings, including referral of the matter for hearing under subsection (i) of this section.

(2) Payment of administrative penalty, disgorged excess revenue, or both. Within 20 days after the date the person receives the notice set out in subsection (f)(2) of this section, the person may accept the determination and recommended administrative penalty and, if applicable, the recommended excess revenue to be disgorged through a written statement sent to the executive director. If this option is selected, the person must take all corrective action required by the commission. The commission by written order will approve the determination and impose the recommended administrative penalty and, if applicable, recommended disgorged excess revenue or order a hearing on the determination and the recommended penalty.

(3) Request for hearing. Not later than the 20th day after the date the person receives the notice set out in subsection (f)(2) of this section, the person may submit to the executive director a written request for a hearing on any or all of the following:

(A) the occurrence of the violation or continuing violation;

(B) the amount of the administrative penalty; and

(C) the amount of disgorged excess revenue, if applicable.

(4) Failure to respond. If the person fails to timely respond to the notice set out in subsection (f)(2) of this section, the commission by order will approve the determination and impose the recommended penalty or order a hearing on the determination and the recommended penalty.

(5) Opportunity to remedy a weather preparedness violation.

(A) This paragraph applies to a violation of PURA §35.0021, §38.075, or a commission rule or order adopted or issued under those sections.

(B) PURA §15.024(c), as written, does not apply to a violation of PURA §35.0021, §38.075, or a commission rule or order adopted or issued under those sections. This paragraph implements PURA §15.024(c), as modified by PURA §15.023(a), §35.0021(g), and §38.075(d), for violations of PURA §35.0021, §38.075, or a commission rule or order adopted or issued under those sections.

(C) The commission may impose an administrative penalty against an entity regulated under PURA §35.0021 or §38.075 that violates those sections, or a commission rule or order adopted under those sections, except:

(i) the commission will assess a penalty for a violation of PURA §35.0021, §38.075, or a commission rule adopted under those sections if the entity against which the penalty may be assessed does not remedy the violation within a reasonable amount of time; and

(ii) the commission will not assess a penalty for a violation of PURA §35.0021, §38.075, or a commission rule or order adopted or issued under those sections if the violation was accidental or inadvertent, and the entity against which the penalty may be assessed remedies the violation within a reasonable period of time.

(D) For purposes of this paragraph, the following provisions apply unless a provision conflicts with a commission rule or order adopted under PURA §35.0021 or §38.075, in which case, the commission rule or order applies.

(i) Not all violations to which this paragraph applies can be remedied. Clauses (C)(i) and (C)(ii) of this paragraph do not apply to a violation that cannot be remedied.

(ii) For purposes of clauses (C)(i) and (C)(ii) of this paragraph, an entity that claims to have remedied an alleged violation and, if applicable, that the alleged violation was accidental or inadvertent has the burden of proving its claim to the commission. Proof that an alleged violation has been remedied and, if applicable, that the alleged violation was accidental or inadvertent must be evidenced in writing, under oath, and supported by necessary documentation.

(iii) An entity that remedies a violation that is discovered during an inspection by the independent organization certified under PURA §39.151 for the ERCOT power region prior to the deadline provided to that entity by the independent organization in accordance with PURA §35.0021 or §38.075 is deemed to have remedied that violation in a reasonable period of time.

(iv) If the independent organization certified under PURA §39.151 has not provided an entity with a deadline, the executive director will determine whether the deadline can be remedied and, if so, the deadline for remedying a violation within a reasonable period of time. The executive director will provide the entity with written notice of the violation and the deadline for remedying the violation within a reasonable period of time. This notice does not constitute notice under paragraph (f)(2) of this section unless it fulfills the other requirements of that subsection. However, the provisions of subparagraph (f)(2)(D) of this section apply to notice under this clause.

(v) The executive director will determine if and when a report should be issued to the commission under subsection (f) of this section and will make a determination as to what further proceedings are necessary.

(vi) If the executive director determines that the alleged violation was not remedied within a reasonable period of time or is a continuing violation, the executive director will issue a report to the commission under subsection (f) of this section and will institute further proceedings, including referral of the matter for hearing under subsection (i) of this section.

(vii) If the commission determines that the deadline for remedying a violation provided by the independent organization certified under PURA §39.151 or determined by the executive director is unreasonable, the commission will determine what the deadline should have been. The commission will use this updated deadline to determine the applicability of subclauses (C)(i) and (C)(ii) of this paragraph and, if appropriate, as a factor in determining the magnitude of administrative penalty to impose against the entity for the violation.

(h) Settlement conference. A settlement conference may be requested by any party to discuss the occurrence of the violation or continuing violation, the amount of the administrative penalty, disgorged excess revenue if applicable, and the possibility of reaching a settlement prior to hearing. A settlement conference is not subject to the Texas Rules of Evidence or the Texas Rules of Civil Procedure; however, the discussions are subject to Texas Rules of Civil Evidence 408, concerning compromise and offers to compromise.

(1) If a settlement is reached:

(A) the parties must file a report with the executive director setting forth the factual basis for the settlement;

(B) the executive director will issue the report of settlement to the commission; and

(C) the commission by written order will approve the settlement.

(2) If a settlement is reached after the matter has been referred to the State Office of Administrative Hearings, the matter will be returned to the commission. If the settlement is approved, the commission will issue an order memorializing commission approval and setting forth commission orders associated with the settlement agreement.

(i) Hearing. If a person requests a hearing under subsection (g)(3) of this section, or the commission orders a hearing under subsection (g)(4) of this section, the commission will refer the case to SOAH under §22.207 of this title (relating to Referral to State Office of Administrative Hearings) and give notice of the referral to the person. For violations of the TWC or a rule or order adopted under chapter 13 of the TWC, if the person charged with the violation fails to timely respond to the notice, the commission by order will assess the recommended penalty or order a hearing to be held on the findings and recommendations in the report. If the commission orders a hearing, the case will then proceed as set forth in paragraphs (1) - (5) of this subsection.

(1) The commission will provide the SOAH administrative law judge a list of issues or areas that must be addressed.

(2) The hearing must be conducted in accordance with the provisions of this chapter and notice of the hearing must be provided in accordance with the Administrative Procedure Act.

(3) The SOAH administrative law judge will promptly issue to the commission a proposal for decision, including findings of fact and conclusions of law, about:

(A) the occurrence of the alleged violation or continuing violation;

(B) whether the alleged violation was cured and was accidental or inadvertent for a violation of any chapter other than PURA chapters 17, 55, or 64; of a commission rule or commission order adopted or issued under those chapters; or of chapter 13 of the TWC; and

(C) the amount of the proposed administrative penalty and, if applicable, disgorged excess revenue.

(4) Based on the SOAH administrative law judge's proposal for decision, the commission may:

(A) determine that a violation or continuing violation has occurred and impose an administrative penalty and, if applicable, disgorged excess revenue;

(B) if applicable, determine that a violation occurred but that, as permitted by subsection (g)(1) of this section, the person remedied the violation within 30 days and proved that the violation was accidental or inadvertent, and that no administrative penalty will be imposed; or

(C) determine that no violation or continuing violation has occurred.

(5) Notice of the commission's order issued under paragraph (4) of this subsection must be provided under the Government Code, chapter 2001 and §22.263 of this title (relating to Final Orders) and must include a statement that the person has a right to judicial review of the order.

(j) Parties to a proceeding. The parties to a proceeding under chapter 15 of PURA relating to administrative penalties or disgorgement of excess revenue will be limited to the person who is alleged to have committed the violation or continuing violation and the commission, including the independent market monitor. This does not apply to a subsequent proceeding under subsection (k) of this section.

(k) Distribution of Disgorged Excess Revenues. Disgorged excess revenues must be remitted to an independent organization, as defined in PURA §39.151. The independent organization must distribute the excess revenue to affected wholesale electric market participants in proportion to their load during the intervals when the violation occurred to be used to reduce costs or fees incurred by retail electric customers. The load of any market participants that are no longer active at the time of the distribution will be removed prior to calculating the load proportions of the affected wholesale electric market participants that are still active. However, if the commission determines other wholesale electric market participants are affected or a different distribution method is appropriate, the commission may direct commission staff to open a subsequent proceeding to address those issues.

(1) No later than 90 days after the disgorged excess revenues are remitted to the independent organization, the monies must be distributed to affected wholesale electric market participants active at the time of distribution, or the independent organization must, by that date, notify the commission of the date by which the funds will be distributed. The independent organization must include with the distributed monies a communication that explains the docket number in which the commission ordered the disgorged excess revenues, an instruction that the monies must be used to reduce costs or fees incurred by retail electric customers, and any other information the commission orders.

(2) The commission may require any affected wholesale electric market participants receiving disgorged funds to demonstrate how the funds were used to reduce the costs or fees incurred by retail electric customers.

(3) Any affected wholesale electric market participant receiving disgorged funds that is affiliated with the person from whom the excess revenue is disgorged must distribute all of the disgorged excess revenues directly to its retail customers and must provide certification under oath to the commission that the entirety of the revenues was distributed to its retail electric customers.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on February 25, 2022.

TRD-202200689

Andrea Gonzalez

Rules Coordinator

Public Utility Commission of Texas

Effective date: March 17, 2022

Proposal publication date: September 3, 2021

For further information, please call: (512) 936-7244


CHAPTER 25. SUBSTANTIVE RULES APPLICABLE TO ELECTRIC SERVICE PROVIDERS

SUBCHAPTER A. GENERAL PROVISIONS

16 TAC §25.8

The Public Utility Commission of Texas (commission) adopts amendments to existing 16 Texas Administrative Code (TAC) §25.8, relating to a Classification System for Violations of Statutes, Rules, and Orders Applicable to Electric Service Providers. The commission adopts this rule with changes to the proposed rule as published in the September 3, 2021, issue of the Texas Register (46 TexReg 5518). The rule will be republished. This rule will implement an amendment to the Public Utility Regulatory Act (PURA) §15.023(b-1) enacted by the 87th Texas Legislature that establishes an administrative penalty not to exceed $1,000,000 for violations of PURA §35.0021 or §38.075, each relating to Weather Emergency Preparedness. In response to filed comments, these rules will also clarify the application of certain statutory provisions relating to the commission's penalty authority and applicable remedy periods.

The commission received comments on the proposed rule from AEP Texas Inc., CenterPoint Energy Houston Electric, LLC, Oncor Electric Delivery Company LLC, and Texas-New Mexico Power Company (collectively, the Joint ERCOT TDUs); Texas Electric Cooperatives, Inc. (TEC); Texas Competitive Power Advocates (TCPA); Texas Public Power Association (TPPA); and Lower Colorado River Authority and Lower Colorado River Authority Transmission Services Corporation (collectively, LCRA).

General Comments

Statutory Interpretation of PURA §15.023(a), §15.024(c), §35.0021(g), and §38.075(d)

PURA §15.023(a) and §15.024(c) were in effect prior to the 87th session of the Texas Legislature and will be referred to as preexisting law. PURA §35.0021 and §38.075 were both enacted by the 87th Texas Legislature and will be referred to as the weather preparedness statutes. Rules adopted and orders issued under these statutes will be referred to as weather preparedness rules and weather preparedness orders respectively.

Commission Comment

Commenters have noted, either explicitly or by implication, several conflicts between the weather preparedness statutes and preexisting law. The commission addresses the specifics of these comments throughout this order where relevant. The statutory underpinnings for the resolution of these conflicts are discussed under this General Comments heading. The weather preparedness statutes were enacted after the preexisting statutes and are more specific in their application. Accordingly, under the Code Construction Act §311.025-31.026, the weather preparedness statutes prevail in any conflicts.

The first issue involving the interaction of preexisting law and the weather preparedness statutes relates to circumstances in which the commission has authority to issue an administrative penalty for a violation of a weather preparedness statute, rule, or order.

Under PURA §15.023(a), "(t)he commission may impose an administrative penalty against a person regulated under (PURA, Title II) who violates (PURA, Title II) or a rule or order adopted under (PURA, Title II)." Notably, the weather preparedness statutes are located in PURA, Title II. Under the Code Construction Act §311.016, "may" creates discretionary authority. Therefore, under preexisting law, the commission has general discretion to impose administrative penalties for violation of a weather preparedness statute, rule, or order.

Each of the weather preparedness statutes contains an identical provision that reads "(t)he commission shall impose an administrative penalty on an entity, including a municipally owned utility or an electric cooperative, that violates a (weather preparedness rule) and does not remedy that violation within a reasonable period of time." Under the Code Construction Act, "shall" imposes a duty. Accordingly, if an entity violates a weather preparedness rule, the commission is required to impose an administrative penalty.

In comments submitted on various provisions throughout the two proposed rules, TCPA, TEC, Joint ERCOT TDUs, and LCRA each interpret the language of the weather preparedness statutes to mean that the commission cannot impose an administrative penalty against an entity that violates a weather preparedness statute, rule, or order unless the entity fails to remedy the violation within a reasonable period of time.

Commission Response

The commission disagrees that it cannot impose an administrative penalty against an entity that violates a weather preparedness requirement unless the entity fails to remedy the violation within a reasonable period of time. As the commenters point out, each of the weather preparedness statutes indicate the commission shall impose a penalty if a violation is not remedied in a reasonable period of time. However, neither of the weather preparedness statutes impose or suggest any limitation on PURA §15.023(a), which provides the commission with discretionary authority to issue a penalty for a violation of PURA, Title II or a rule or order adopted under Title II.

The interpretation that the commission is prevented from issuing an administrative penalty without first giving an entity an opportunity to remedy the violation fails on a policy level as well, as such a limitation would create a significant compliance loophole. Under such an interpretation, an entity would be incentivized to delay implementing any costly weather preparedness measure until after it was identified by the Electric Reliability Council of Texas (ERCOT) or the commission, because the regulatory risk of noncompliance would be eliminated. If the violation is discovered, the entity would be assured a reasonable period of time to remedy the violation, regardless of the circumstances surrounding the violation. If it is not discovered, potentially costly upgrades could be avoided completely. Moreover, an entity could even fail to meet the same requirement multiple times, each time relying upon a built-in cure period to address any compliance issues.

The commission adopts amended §22.246(g)(5)(C) to clarify the commission's discretionary penalty authority under preexisting law.

The next interaction of potentially conflicting statutes involves potential exceptions to the commission's discretionary penalty authority under §15.023(a). The first exception originates from the aforementioned provision of the weather preparation statutes that requires the commission to impose a penalty if a weather preparation rule is violated and not remedied in a reasonable period of time. The second comes from PURA §15.024(c), which states that "(a) penalty may not be assessed under this section if the person against whom the penalty may be assessed remedies the violation before the 31st day after the date the person receives (a formal notice of violation). A person who claims to have remedied an alleged violation has the burden of proving to the commission that the alleged violation was remedied and was accidental or inadvertent." Under the Code Construction Act §311.016, "may not" imposes a prohibition. Therefore, the commission is prohibited from imposing a penalty for a violation of Title II or a rule or order adopted under Title II if the entity can demonstrate that the violation was accidental or inadvertent and was remedied before the 31st day after receiving notice under Subsection (b).

Commission Response

The commission modifies §22.246 to reflect two exceptions to the commission's discretionary penalty authority. First, consistent with the weather preparedness statutes, under adopted §22.246(g)(5)(C)(ii), the commission is required to issue an administrative penalty for a violation of a weather preparedness rule that was not remedied within a specified timeframe. Second, consistent with PURA §15.024(c), under adopted §22.246(g)(5)(C)(ii), the commission is prohibited from issuing an administrative penalty for a violation of a weather preparedness statute, rule, or order if the violation is remedied within a specified timeframe, and was accidental or inadvertent. In this instance, the alleged violator has the burden of proving that each of these conditions was met. Each of these exceptions to the commission's general discretionary authority is justified because under the Code Construction Act, the more specific provisions of PURA §15.024(c) and the weather preparedness statutes control over PURA §15.023(a). The commission addresses the specified timeframes below. The commission also modifies the rule to clarify that neither of the above exceptions apply to a violation that is not remediable.

The third potential conflict of laws relates to the appropriate remedy period for purposes of the exceptions to the commission's discretionary administrative authority. Under preexisting law, the general remedy period for any violation is 30 days after the receipt of a formal notice of violation. Under the weather preparedness statutes, the remedy period is a reasonable period of time. TPPA contends that these are two distinct remedy periods and argued that the commission should clarify that the two periods are different. Conversely, Joint ERCOT TDUs argue that the reasonable remedy period takes precedence over the generic 30-day remedy period, because the reasonable remedy period is specific to weather preparedness violations. Joint ERCOT TDUs further argue that a reasonable remedy period is "a fact question, dependent on the particular facts and circumstances attendant to the situation. A reasonable period of time for remedying a violation of a rule established pursuant to the Weatherization Statutes may not, therefore, be established by rule, or without any consideration of the particular facts and circumstances giving rise to a violation."

Commission Response

The commission agrees with Joint ERCOT TDUs - while acknowledging that Joint ERCOT TDUs were making this argument in support of a different ultimate position - that there is only a single, reasonability-based remedy period for violations of weather preparation requirements. Weather preparedness violations pose a serious risk to reliability of the bulk electric system, and an entity that violates these rules must remedy those violations as expediently as reasonably possible. Applying a generic remedy period, as provided by preexisting law, or two separate remedy periods, as recommended by TPPA, would lead to contradictory results and would undermine the effectiveness of the commission's statutorily mandated regulatory objectives. If, for example, the reasonable remedy period for a violation is 20 days, if an entity fails to remedy that violation within 20 days, the commission is required by the weather preparedness statutes to impose an administrative penalty. Affording that entity a second remedy period after it has received a formal notice of violation from the executive director clearly conflicts with the plain language of the weather preparedness statutes.

Under the adopted §22.246(g)(5)(C), the remedy period for both exceptions to the commission's discretionary penalty authority is a "reasonable" period of time. The commission agrees with Joint ERCOT TDUs that the weather preparedness statutes establish a remedy period that is dependent upon the particulars of the violation and, potentially, the circumstances surrounding the violation.

The final potential conflict between preexisting law and the weather preparedness statutes is the process and timing surrounding the remedy periods. Under preexisting law, the remedy period begins after the entity has received a formal notice of violation from the executive director. Under the weather preparedness statutes, the remedy period, in many cases, will begin when ERCOT provides the entity with the results of a weather preparedness inspection. This is a significant distinction, because §22.246 provides specific notice and process requirements that are not applicable to a remedy period that takes place prior to the issuance of a formal notice of violation.

Commission Response

The process surrounding the application of the period for remedying violations is determined by the applicable substantive weather preparedness rules. However, because the commission has not yet adopted its final Phase II weather preparedness rules, adopted §22.246(g)(5)(D) establishes default procedural rules surrounding remedying weather preparedness violations that supplement the other notice of violation provisions of that section. These procedural provisions mirror the preexisting process for the generic remedy period under §22.246(g)(1).

Specifically, under adopted §22.246(g)(5)(D) an entity that remedies a violation discovered during an ERCOT inspection by the deadline provided by ERCOT is deemed to have remedied that violation in a reasonable period of time. If ERCOT has not provided a deadline, the executive director will provide the entity with a written notice describing the violation and a deadline for remedying the violation. Finally, if the commission disagrees that the deadline provided by ERCOT or the executive director is reasonable, the commission will determine what the deadline should have been. The commission will use this updated deadline to determine the applicability of the exceptions to the commission's discretionary penalty authority and, if appropriate, as a factor in determining the magnitude of the administrative penalty assessed against the entity for the violation. This updated deadline does not, however, guarantee that the entity will be provided additional time to remedy the violation in the future. Accordingly, an entity should continue its remedial efforts even after it misses the deadline provided by ERCOT or the executive director.

§22.246(b)(5), Definition of violation

§22.246(b)(5) defines the term "Violation" as "(a)ny activity or conduct prohibited by PURA...commission rule, or commission order."

TCPA recommended adding a subparagraph to §22.246(b)(5) that would clarify that with regard to weather preparedness standards, a violation does not occur until after ERCOT has conducted an inspection, found a potential violation, and provided the entity with a reasonable opportunity to cure the potential violation. TCPA argued this is required by PURA §35.0021(c).

Commission Response

The commission declines to modify the definition of violation as requested by TCPA. A violation occurs when an entity fails to comply with PURA, a commission rule, or a commission order. Whether ERCOT identifies this violation in one of its inspections or the entity eventually remedies the violation has no bearing on whether a violation occurred.

The plain language of PURA §35.0021 requires ERCOT to provide an entity with a reasonable period of time to "remedy any violation" and "report to the commission any violation" related to weather emergency preparedness. (Emphasis added). At no point does it refer to "potential violations" as suggested by TCPA. Moreover, acknowledging and documenting each failure to comply as a violation is important for establishing whether an entity has a history of violations, an important consideration in determining appropriate penalty amounts in any future enforcement proceedings related to that issue under §25.246(c)(3)(C).

§22.246(c), Penalty amounts

Existing §22.246(c) outlines the maximum penalty amounts that can be assessed for violations of PURA or a rule or order adopted under PURA and provides a list of penalty factors that the commission must consider when determining what level of penalty to impose for a particular violation. Proposed §22.246(c) clarifies that for violations of PURA §35.0021 and §38.075, or a rule or order adopted under those provisions, the commission may impose a penalty of up to §1,000,000 per violation per day.

LCRA recommended the addition of a new paragraph in §22.246(c) clarifying that the commission would not assess an administrative penalty for an entity's first violation of a weather preparedness requirement if the risk posed by the violation is low or if the entity cures the violation in a reasonable period of time.

Commission Response

The commission declines to limit its ability to assess an administrative penalty for an entity's first violation of a weather preparedness rule or statute. Neither PURA §35.002 or §38.075 include any penalty exemptions for first time offenders. The commission will consider the facts and circumstances surrounding each violation in determining whether to assess an administrative penalty, including the history of previous violations and efforts made to correct the violation, as required by this subsection.

§22.246(c)(1), Separate violations

Under paragraph §22.246(c)(1), each day a violation continues is a separate violation for which an administrative penalty can be assessed.

TCPA requested that the commission insert language clarifying that an administrative penalty will not be assessed until after the entity has been provided a reasonable period of time to remedy a violation discovered in an inspection or to appeal the inspector's determination that a violation has occurred. TCPA also requested language that a violation would not be assessed if a generation resource is following the process to mothball or retire a resource.

Commission Response

The commission declines to add language to §22.246(c)(1) that a penalty will not be assessed until after the entity has been provided a reasonable amount of time to remedy any potential violation discovered in an inspection or to appeal the inspection. Remedy periods are discussed in the commission's response to general comments above. With regard to the ability of an entity to appeal the results of an ERCOT inspection before a penalty is issued, the commission, not ERCOT, retains authority to determine whether a violation has occurred, whether the violation was remedied in a reasonable amount of time, and whether the assessment of an administrative penalty is appropriate. The commission will not assess any administrative penalties without providing the entity an opportunity to request a hearing on any contested issues.

The commission also declines to specify that a violation will not be assessed if a generation resource is following the process to mothball or retire a resource as requested by TCPA. Whether a particular fact pattern constitutes a violation of the commission's weather preparedness rules or which scenarios might excuse such a violation is beyond the scope of this rulemaking.

§22.246(c)(2), Maximum penalties

Proposed paragraph §22.246(c)(2) identifies the maximum administrative penalty of $1,000,000 for violations of PURA §35.002 and §38.075 and maximum administrative penalty of $25,000 for all other violations of PURA and commission rules.

TPPA pointed out typographical errors in citations of PURA §35.002 and §38.075 in §22.246(c)(2).

Commission Response

The commission makes the recommended changes.

TEC and LCRA each recommended modifying §22.246(c)(2) to limit the imposition of penalties to "continuing violations." TEC's suggested language appears to only permit penalties for continuing violations, and the LCRA's proposed language only allows for a penalty of over $5,000 for a violation "that is a continuing violation that was not accidental or inadvertent and was not remedied within a reasonable period of time."

TCPA made general comments regarding §22.246(c)(2) requesting that the commission clarify what constitutes a "separate violation" and proper metrics for consideration of a violation of the weatherization rule to mitigate the risk of loss by a respondent facing a prospective violation.

Commission Response

TEC and LCRA misconstrue the meaning of the defined term "continuing violation." A continuing violation is not, as these parties suggest, merely an ongoing violation after parties have had an opportunity to remedy. A continuing violation is "any instance in which the person alleged to have committed a violation attests that the 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." In other words, if an entity attempts to avail itself of the provisions under §22.246(g)(1)(B) by attesting that a violation has been remedied and was accidental, but that attestation was invalid, that violation becomes a continuing violation. Under §22.246(g)(1)(E), the executive director will institute further proceedings against the entity, rather than permit the entity an opportunity to remedy the violation.

The commission adds adopted §22.246(g)(2)(D)(vii), which requires the executive director to institute further proceedings if the executive director determines a violation is a continuing violation.

§22.246(c)(3), Penalty factors

§22.246(c)(3) identifies aggravating and mitigating factors that the commission must consider when assessing a penalty for an administrative violation.

TCPA and LCRA recommended additional mitigating and aggravating factors be added to §22.246(c)(3) to inform the commission's assessment of an administrative penalty. TCPA specifically recommended the addition of whether the violation was attributable to mechanical or electrical failures, whether the violation could have been reasonably anticipated and avoided, and whether the asset owner demonstrated good faith, including preventive or corrective actions.

LCRA recommended new penalty factors that account for "risk, severity, and repeat offenses" when assessing penalties for weatherization.

Commission Response

The commission declines to implement the specific recommendations of TCPA and general recommendations of LCRA regarding the addition of new penalty factors to §22.246(c)(3). Paragraph §22.246(c)(3) is intended to mirror penalty factors the commission is required to consider when establishing its penalty classification system under PURA §15.023(c). Further, the additional factors proposed by commenters are already encompassed by §22.246(c)(3)(A), (C), (E) and (F), which specify that the amount of an administrative penalty must be based on the seriousness of the violation, history of previous violations, efforts to correct the violation, and any other matter that justice may require.

§22.246(f)(2), Notice of report

Existing §22.246(f) allows the executive director to initiate an enforcement proceeding by providing the commission a report alleging a violation by a specific entity. Subparagraph §22.246(f)(2)(A) requires the executive director to provide notice of this report to the entity alleged to have committed the violation by regular or certified mail.

TCPA, citing concerns related to increased remote work due to the pandemic, recommended that §22.246(f)(2)(A) require e-mail notice of the report from the executive director regarding the violation in addition to regular or certified mail.

Commission Response

PURA §15.024(b) requires that this notice be given by regular or certified mail and (b-1) specifies that notice is deemed to have been received on the fifth day after the commission sends written notice by mail addressed to the person's mailing address as maintained in commission records or, if sent by certified mail, on the date the written notice is received, or delivery is refused. Therefore, the commission cannot, by rule, materially alter the conditions upon which notice is deemed to have been received by imposing additional e-mail requirements. The executive director is not, however, prohibited from sending email notice in addition to notice by mail.

§22.246(g), Options for response

Subsection §22.246(g) provides a list of options for a respondent who has been issued a notice of violation or notice of continuing violation. The options consist of an opportunity to remedy the violation, pay the administrative penalty or disgorge excess revenue, or both, or request a hearing. The rule also identifies the consequences for failure to respond to a notice of violation or notice of continuing violation.

LCRA recommended the addition of a new paragraph under this subsection that would prohibit the commission from issuing an administrative penalty for violations of weather preparedness standards if a person self-reports the violation and certifies that the violation has been remedied. LCRA's proposed new paragraph would also require the self-report to submitted in writing, under oath, supported by necessary documentation, and delivered to the executive director by certified mail.

Commission Response

The commission declines to restrict its penalty authority in circumstances where an entity self-reports and corrects a violation as requested by LCRA. Such a restriction on the commission's penalty authority would create a compliance loophole that would allow an entity to strategically delay compliance without consequence. Under §22.246(c)(3), when establishing the appropriateness and magnitude of an administrative penalty, the commission will consider efforts to correct the violation and any other matter that justice may require, including the manner in which the respondent has cooperated with the commission during an investigation of the alleged violation.

TPPA and Joint ERCOT TDUs each commented that §22.246(g)(1) did not properly apply to weather preparedness violations. TPPA recommended that the commission clarify that the 31-day cure period provided by §22.246(g) was not the same as the reasonable period of time that an entity has to remedy a weather preparedness violation under the weather preparedness statutes. TPPA argued that if ERCOT did not give entities a 31-day period following an inspection, it could conflict with this procedural rule.

Joint ERCOT TDUs, on the other hand, argued that all of §22.246(g) should not apply to weather preparedness violations and instead proposed an entirely new section applicable to such violations. Joint ERCOT TDUs proposal mirrors §22.246(g) and imposes an extremely detailed regulatory structure for the commission's processing of weather preparedness violations, including timelines and specific standards for responses and mitigation plans. Joint TDUs' full proposal will not be fully detailed in this preamble.

Commission Response

The commission agrees with TPPA and Joint ERCOT TDUs that §22.246(g) does not fully align with the weather preparedness statutes with regards to the applicable remedy period. As discussed in the commission's response to General Comments above, this is primarily due to a conflict of laws between the weather preparedness statutes and preexisting law. As detailed above, the commission modifies §22.246(g)(1) to clarify that it does not apply to weather preparedness violations and adopts new §22.246(g)(5). This new paragraph clarifies the commission's penalty authority and adapts the procedural requirements of §22.246(g) to the requirements of the weather preparedness statutes. The commission declines to adopt TPPA's recommended approach for reasons discussed under General Comments. The commission declines to adopt Joint ERCOT TDU's approach, because it is unnecessarily detailed. The commission will further address the process surrounding weather preparedness violations in its Phase II weather preparedness rulemaking.

§22.246(g)(1)(C), Grace period

Under §22.246(g)(1)(C), if the executive director determines that an alleged violation was remedied within 30 days and the violation was accidental or inadvertent, no administrative penalty will be assessed.

LCRA recommended that §22.246(g)(1)(C) be amended to specify that no administrative penalty will be assessed for weather preparedness violations if the executive director determines that the violation was remedied within a reasonable period of time.

Commission Response

The commission declines to amend subparagraph §22.246(g)(1)(C) to specify that no administrative penalty will be assessed for weather preparedness violations if the executive director determines that the violation was remedied within a reasonable period of time. The commission addressed this issue of remediation in its response to general comments above.

§25.8, Classification system for violations of statutes, rules, and orders applicable to electric service providers.

§25.8(b), Classification system

Subsection 25.8(b) classifies violations of PURA and commission rules into C, B, and A class violations, in increasing order of severity and maximum assignable administrative penalty amount. The proposed rule added language to §25.8(b)(3)(A), which addresses class A violations, that a violation of PURA §35.0021, PURA §38.075. or a commission rule or commission order adopted under PURA §35.0021 or PURA §38.075, is a Class A violation and the administrative penalty will not exceed $1,000,000 per violation per day. The proposed rule further clarifies that other class A violations retain the prior maximum assignable penalty amount of $25,000 per violation per day.

TPPA, TEC, and LCRA each criticized the proposed rule's grouping of all weather preparedness violations as class A violations with a million-dollar penalty ceiling. TPPA argued that two tiers of class A violations is confusing and that establishing separate tiers for weather preparedness violations would set expectations and "provide valuable instruction to the market before any violations occur."

Each of these commenters argued that non-material violations, such as failure to file a report, should not result in million-dollar penalties. TEC and LCRA suggested that paperwork violations should be classified as class C violations, and LCRA further specified that a weather-preparedness violation should only be a class A violation if it "creates economic harm in excess of $5,000 to a person or persons, property, or the environment, or creates an economic benefit to the violator in excess of $5,000; creates a hazard or potential hazard to the health or safety of the public; or causes a risk to the reliability of a transmission or distribution system or a portion thereof."

Commission Response

The commission declines to classify "paperwork violations" as class C violations or otherwise adopt any language that would limit the commission's ability to assign significant administrative penalties for any violation of its weather preparedness rules or orders. As has been repeatedly pointed out by commenters, the weather preparedness statutes create a preparation standard, not a performance standard, and couple this standard with a million-dollar penalty ceiling. Therefore, it is clear that the commission is to utilize the increased penalty authority prior to the occurrence of any actual weather-related performance failures - not after it is too late to prevent any human suffering, loss of life, or property damage caused by those failures. Furthermore, even violations such as "paperwork violations," could materially interfere with the commission's and ERCOT's compliance regimen, which may require the inspection of hundreds of facilities and the review and evaluation of remediation plans for any instances of noncompliance identified during these inspections. Seemingly minor violations, such as missing submission deadlines or errors in those submissions, could impede the timely completion and review of inspections or otherwise interfere with the commission's and ERCOT's ability to evaluate and ensure the weather-readiness of the grid.

The commission disagrees with TPPA that having two tiers of class A violations is confusing. The language of the rule articulates, with precision, the maximum penalty associated with each type of violation.

The commission also disagrees with TPPA's argument that more nuanced penalty classifications of weather-preparedness violations would provide meaningful guidance to market participants. Establishing penalty categories for certain types of violations only provides meaningful guidance to an entity that is evaluating whether to comply with a particular rule based on the severity of the penalty for each class of infraction. The commission expects all entities to fully comply with all applicable weather-preparedness rules to ensure the reliability of the grid. The specter of significant administrative penalties is specifically meant to deter any economic calculation that might distract an entity from directing its full efforts to achieving compliance with these standards.

TPPA argued that the commission should create a separate tiering system for weatherization-related violations. TPPA noted that the "chief author" of SB 3, Senator Charles Schwertner, produced an explanatory document that clarified that it was his intent that the commission create a penalty matrix, "to ensure that the $1 million penalty cap is focus on extreme violations and not simple violations like paperwork errors."

Commission Response

The commission also declines to create a separate penalty classification system for weather-preparedness violations as requested by TPPA. The commission is not persuaded by TPPA's argument that a summary document distributed by one of the bill's authors prior to a committee hearing on the bill constitutes definitive legislative intent for how the statute should be interpreted. Moreover, the Legislature explicitly required creation of penalty classification systems in sections 6, 20, and 31 of SB 3, each addressing other issues. Had the Legislature intended the creation of a penalty classification system for electric weather-preparedness violations, it would have included a similar requirement. Finally, under PURA §15.023(d), a classification system established under PURA §15.023(c) "shall provide that a 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." Categorically limiting any type of weather-preparedness violation to $5,000 per violation per day is inappropriate, given the extremely high priority that both the commission and the Legislature places on compliance in this area.

TEC argued that a violation should only be a class A violation if it was a "continuing violation" and there had been "notice and a reasonable opportunity to cure the violation." TCPA argued that §25.8(b)(3)(A) should incorporate text reflecting that separate violations mean a company's distinct action or inaction that directly results in a violation, rather than a resource-by-resource, unit-by-unit, or other duplicative violation that results in the "stacking of penalties where a single action or inaction results in multiple units or resources failing to abide by the commission rule or commission order."

Commission Response

The commission disagrees with TEC for the reasons discussed in its response to §22.246(c)(2). and TCPA for the reasons discussed in its response to §22.246(c)(1).

All comments, including any not specifically referenced herein, were fully considered by the commission. In adopting this rule, the commission makes other minor modifications for the purpose of clarifying its intent.

These rule amendments are adopted under the following provision of PURA: §14.001, which provides the commission the general power to regulate and supervise the business of each public utility within its jurisdiction and to do anything specifically designated or implied by PURA that is necessary and convenient to the exercise of that power and jurisdiction; §14.002, which provides the commission with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction; §15.023, which establishes that the penalty for a violation of a provision of PURA §35.0021 or PURA §38.075 may be in an amount not to exceed $1,000,000 for a violation and that each day a violation continues is a separate violation for purposes of imposing a penalty.

Cross reference to statutes: PURA §§14.001, 14.002, and 15.023, 35.0021, and 38.075.

§25.8.Classification System for Violations of Statutes, Rules, and Orders Applicable to Electric Service Providers.

(a) Purpose. The purpose of this rule is to establish a classification system for violations of the Public Utility Regulatory Act (PURA) and related commission rules and orders, and to establish a range of penalties that may be assessed for each class of violations.

(b) Classification system.

(1) Class C violations.

(A) Penalties for Class C violations may not exceed $1,000 per violation per day.

(B) The following violations are Class C violations:

(i) failure to file a report or provide information required to be submitted to the commission under this chapter within the timeline required;

(ii) failure by an electric utility, retail electric provider, or aggregator to investigate a customer complaint and appropriately report the results within the timeline required;

(iii) failure to update information relating to a registration or certificate by the commission within the timeline required; and

(iv) a violation of the Electric no-call list.

(2) Class B violations.

(A) Penalties for Class B violations may not exceed $5,000 per violation per day.

(B) All violations not specifically enumerated as a Class C or Class A violation are Class B violations.

(3) Class A violations.

(A) 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 is a Class A violation and the administrative penalty will not exceed $1,000,000 per violation per day. Penalties for all other Class A violations will not exceed $25,000 per violation per day.

(B) The following types of violations are Class A violations if they create economic harm in excess of $5,000 to a person or persons, property, or the environment, or create an economic benefit to the violator in excess of $5,000; create a hazard or potential hazard to the health or safety of the public; or cause a risk to the reliability of a transmission or distribution system or a portion thereof.

(i) A violation related to the wholesale electric market, including protocols and other requirements established by an independent organization;

(ii) A violation related to electric service quality standards or reliability standards established by the commission or an independent organization;

(iii) A violation related to the code of conduct between electric utilities and their competitive affiliates;

(iv) A violation related to prohibited discrimination in the provision of electric service;

(v) A violation related to improper disconnection of electric service;

(vi) A violation related to fraudulent, unfair, misleading, deceptive, or anticompetitive business practices;

(vii) Conducting business subject to the jurisdiction of the commission without proper commission authorization, registration, licensing, or certification;

(viii) A violation committed by ERCOT;

(ix) A violation not otherwise enumerated in this paragraph (3)(B) of this subsection that creates a hazard or potential hazard to the health or safety of the public;

(x) A violation not otherwise enumerated in this paragraph (3)(B) of this subsection that creates economic harm to a person or persons, property, or the environment in excess of $5,000, or creates an economic benefit to the violator in excess of $5,000; and

(xi) A violation not otherwise enumerated in this paragraph (3)(B) of this subsection that causes a risk to the reliability of a transmission or distribution system or a portion thereof.

(c) Application of enforcement provisions of other rules. To the extent that PURA or other rules in this chapter establish a range of administrative penalties that are inconsistent with the penalty ranges provided for in subsection (b) of this section, the other provisions control with respect to violations of those rules.

(d) Assessment of administrative penalties. In addition to the requirements of §22.246 of this title (relating to Administrative Penalties), a notice of violation recommending administrative penalties will indicate the class of violation.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on February 25, 2022.

TRD-202200690

Andrea Gonzalez

Rules Coordinator

Public Utility Commission of Texas

Effective date: March 17, 2022

Proposal publication date: September 3, 2021

For further information, please call: (512) 936-7244


SUBCHAPTER C. INFRASTRUCTURE AND RELIABILITY

The Public Utility Commission of Texas (commission) adopts the repeal of 16 Texas Administrative Code (TAC) §25.53, relating to Electric Service Emergency Operations Plans, and also adopts its replacement, new 16 Texas Administrative Code (TAC) §25.53, relating to Electric Service Emergency Operations Plans. The commission adopts new §25.53 with changes to the proposed text as published in the December 17, 2021, issue of the Texas Register (46 TexReg 8414). The rule will be republished.

This rule implements standards for emergency operations plans for electric utilities, transmission and distribution utilities, power generation companies (PGC), municipally owned utilities (MOUs), electric cooperatives, retail electric providers (REPs), and the Electric Reliability Council of Texas (ERCOT) as required by Tex. Util. Code §186.007 as amended by Senate Bill 3 (SB 3) in the 87th Legislature Regular Session.

The commission received comments on the proposed rule from City of Houston, Sharyland Utilities LLC (Sharyland), Texas Public Power Association (TPPA), Texas Electric Cooperative's Inc. (TEC), AEP Texas Inc., Electric Transmission Texas, LLC, and Southwestern Electric Power Company (collectively, AEP), Guadalupe Valley Electric Cooperative Inc. (GVEC), Texas-New Mexico Power Company (TNMP), Entergy Texas Inc. (Entergy), the Lower Colorado River Authority and Lower Colorado River Authority Transmission Services (collectively, LCRA), the Steering Committee of Cities Served by Oncor (OCSC), Southwestern Public Service Company (SPS), Texas Competitive Power Advocates (TCPA), Oncor Electric Delivery Company LLC (Oncor), Office of Public Utility Counsel (OPUC), Enbridge Inc. (Enbridge), El Paso Electric Company (EPEC), CenterPoint Energy Houston Electric LLC (CenterPoint), Alliance for Retail Markets (ARM), Texas Legal Services Center (TLSC), Octopus Energy (Octopus), and East Texas Electric Cooperative Inc. (ETEC).

The following entities testified at a public hearing on the proposed rulemaking held on January 11, 2022: TLSC on behalf of itself and the Durable Medical Equipment Task Force (DMETF), the Texas Council of Medical Disabilities (TCMD) on behalf of itself and DMETF, Texas Medical Equipment Providers Association (TexMEP), Disability Rights Texas (DRT), Angel Medical Supply (AMS), Arc of Dallas-Fort Worth, Medical Legal Partnership (MLP), and Texas Parent to Parent (TPP). The following individuals also testified at the January 11, 2022, public hearing on the proposed rulemaking: Laura Taylor, Adrian Trigg, Laura Lehman, Amy Litzinger, Linda Litzinger, Ellen Bowman, Greta James, and Valerie Doggett.

General Comments

Entergy emphasized that its EOP has been developed over time based on many factors including the "collective operating experience" of the company and its affiliates. As such, Entergy requested that the proposed rule reflect practical considerations of individual companies and avoid requiring the "creation of a parallel plan in a different format" that serves the same purpose, as such an endeavor would consume considerable resources and risk confusion.

Commission Response

The rule does not require entities to create new or multiple EOPs. Existing plans that contain, at a minimum, the information detailed in the rule will satisfy the rule's requirements, as will a collection of pre-existing documents, such as specific procedural manuals, that each contain portions the required information. The rule also does not require an entity to follow the outline of the rule when drafting its plan to be filed. Moreover, an entity must file an executive summary of its emergency operations plan that includes specific references to locate the mandatory content.

Enbridge argued that the proposed rule creates unnecessary administrative burdens, exposes utilities to unnecessary commercial harm with no proportionate benefit to grid reliability, and unintentionally limits a utility's discretion to manage safety programs. Enbridge contended that ERCOT or the commission is not best situated to unilaterally determine what is necessary for an EOP. Lastly, Enbridge noted that any change requested by either ERCOT or the commission requires a significant time investment to review, test, and implement and urged the commission to consider these factors in its rulemaking.

Commission Response

The commission disagrees with Enbridge's assessment of the proposed rule as unduly burdensome. Tex. Util. Code §186.007 explicitly requires the commission to analyze and evaluate emergency operations plans to assess the ability of the electric utility industry to withstand extreme events. Emergency operations plans must contain sufficient information for the commission to complete this determination. Moreover, this rule does not limit an entity's ability to tailor its emergency operations plan to its system. If an entity does not have plans that address one or more of the specific minimum requirements, then the entity must create that plan based on the entity's unique knowledge of its personnel, operations, system, and facilities. However, this rule does not require an entity to substantively alter the contents of its emergency operations plan, so long as that plan is complete. The commission more substantively addresses Enbridge's concerns in response to comments on subsection (d)(2).

ETEC highlighted that EOPs must be limited in scope to effectively assist utility personnel in responding to an emergency event. ETEC argued that the commission has authority under PURA §41.004(5)(A) "to require reports of electric cooperative operations only to the extent necessary to ensure the public safety" and requested the commission modify the rule as necessary to make clear that "no unintended jurisdictional expansion is created or implied."

Commission Response

The commission declines to modify the rule in response to the general comments of ETEC. The requirements of the adopted rule are within the commission's jurisdiction under Tex. Util. Code §186.007(a-1).

TCPA advised that an EOP is not a singular document, but a compendium of procedures implemented by various teams across an organization in response to certain emergency conditions. As a result, TCPA argued that the proposed rule requirements for a consolidated EOP would diminish the usefulness of emergency procedures that are located in a potentially voluminous consolidated EOP.

Commission Response

As previously noted, the rule does not require an entity to change existing emergency operations plans, except to the extent that those plans do not address the required criteria. The rule does not require a particular organization or format for the EOP. However the executive summary must identify how the EOP - in whatever form it takes - fulfills the minimum requirements of this rule.

ARM argued that the proposed rule significantly and unnecessarily adds to the requirements a REP must provide in its EOP and requested the commission revise the proposed rule so that the imposed requirements are not overly burdensome or risk disclosure of sensitive information.

Commission Response

The requirements of Tex. Util. Code §186.007 apply to retail electric providers. Therefore, the adopted rule applies to retail electric providers. The commission addresses the sensitivity of the information included in an EOP in response to comments on subsection (c).

City of Houston recommended that the proposed rule require an entity to notify affected critical infrastructure customers in advance of filing updated EOPs or annexes to provide those customers with an initial opportunity to provide feedback.

Commission Response

The commission declines to require entities to provide notice of changes to its EOP to a critical infrastructure customer prior to filing those changes with the commission as requested by the City of Houston. An entity may serve numerous critical infrastructure customers. Such a requirement could create significant delays in implementing changes to EOPs, as well as result in the disclosure of sensitive information to countless other entities. Moreover, an entity's EOP is the repository of its own emergency procedures. With some limited exceptions, each entity is in the best position to determine when it needs input from third parties prior to implementing changes to its EOP.

EOP Public Hearing

On January 11, 2022, a public hearing was held relating to proposed §25.53. Commenters at the public hearing were individuals with disabilities or medically dependent on electricity due to the use of Durable Medical Equipment (DME), or their representatives, and other interested parties with comments that relate to residential critical load customers, emergency preparedness, and experiences from Winter Storm Uri.

Commission Response

The commission thanks the organizations and individuals who participated in the hearing held on January 11, 2022, and sincerely appreciates the personal stories shared by attendees. The commission endeavors to account for the collective concerns of the hearing participants and has taken those concerns into account where appropriate within the scope of the rules.

TLSC, DMETF, TCMD, TexMep DRT, AMS Arc of Dallas-Fort Worth, MLP, TPP, Ms. Taylor, Mr. Trigg, Ms. Lehman, Amy and Linda Litzinger, Ms. James, and Ms. Doggett, recommended that the proposed rule require providers of electricity to prioritize maintaining electric service for medically fragile individuals and those who are medically dependent on electricity when planning for load shed and power restoration during energy emergencies. DRT stated that the proposed rule does not specify the prioritization of residential critical customers in an EOP. TPP recommended that houses with a critical need, such as use of DME, receive uninterrupted power during an emergency.

Commission Response

The commission cannot require utilities to guarantee individuals an uninterrupted supply of power during an energy emergency, because the circumstances surrounding an energy emergency may make such a task impossible. Qualifying individuals can apply for critical status under §25.497, and under §25.52 customers with special in-house life-sustaining equipment are considered critical load. Under adopted subsection (e)(1)(B)(iii) of this rule, the entities that are responsible for implementing load shed must include a load shed annex that contains a procedure for maintaining an accurate registry of critical load customers. However, determining how utilities should prioritize among various critical load entities for load shed and power restoration purposes is beyond the scope of this rulemaking project. The commission anticipates addressing critical loads in a future rulemaking project, which may be informed by insights from analyzing the load shed annexes required by this rule.

TLSC and the Texas Council of Medical Disabilities (TCMD) on behalf of itself and the DMETF recommended the proposed rule include a disability annex as part of the required annexes under proposed subsection (e).

Commission Response

The commission declines to adopt the specific recommendations of TLSC, DMETF, and TCMD to include a separate disability annex. An annex is designed to address how an entity plans to respond in an emergency involving a specific type of hazard or threat. However, as previously discussed, adopted subsection (e)(1)(B)(iii) establishes a procedure for maintaining an accurate registry of critical load customers under the load shed annex. This annex also requires inclusion of processes for providing assistance to critical load customers in the event of an unplanned outage, for communicating with the critical load customers, for coordinating with government and service agencies as necessary during an emergency, and for training staff with respect to serving critical load customers.

Ms. Doggett, Ms. Lehman, MLP, and AMS recommended the commission take the extraordinary costs incurred by medically fragile individuals and individuals medically dependent on electricity associated with the winter storm into account in the proposed rulemaking. Ms. Doggett emphasized that the costs incurred when power is lost due to an emergency can quickly become unmanageable, such as purchasing a generator, in addition to pre-existing costs that include medication and therapy. Ms. Lehman and AMS commented on the expense and time commitment involved with dealing with Medicaid and Medicare for a backup generator or DME, which is often not covered. AMS stressed that backup DME can be crucial for individuals medically dependent on electricity during an emergency and is an unrecoverable, added expense for small medical suppliers and patients alike. MLP recommended the commission adopt a proactive, responsive approach to the proposed rule to assist all members of the community and to assist in mitigating historical inequities in power and housing.

Commission Response

Costs incurred by medically fragile individuals and those medically dependent upon electricity during a winter storm are beyond the scope of this rulemaking. However, the commission's analysis of EOPs is an important part of its effort to focus on maintaining service during emergencies so that these costs are not incurred in the first place.

TLSC, TCMD, DRT, and Ms. Doggett stressed the importance of wellness checks for disabled individuals and those medically dependent on electricity.

Commission Response

The commission declines to modify the language of this rule to add a requirement for entities subject to this rule to conduct wellness checks. Wellness checks are addressed in Tex. Gov. Code Chapter 418, and are beyond the scope of this rulemaking.

Arc of Dallas-Fort Worth and Ellen Bowman emphasized that water supply is just as crucial as electricity during an emergency event and recommended that utilities that support disabled individuals, such as water companies, also be designated as critical and receive an uninterrupted supply of power.

Commission Response

The issue of water supply is beyond the scope of a rulemaking on electric industry EOPs, except as it relates to water facilities as critical customers of electric service. The commission is working with water utilities to ensure that electric utilities are provided with information regarding which water facilities are critical so that this information can be considered for load shed planning. The commission may address this topic further through a guidance document or as a part of future rulemakings on critical load.

TLSC commented that the confidentiality and sharing of critical load customer information should be addressed in the proposed rule, specifically as it relates to allowance for dissemination of residential critical customer information from an entity during an emergency.

Commission Response

TLSC's proposal relates to 16 TAC §25.497 and is therefore outside the scope of this rulemaking. The commission notes that the load shed annex under adopted subsection (e)(1)(C) requires entities to plan for the sharing of critical customer information and therefore addresses TLSC's concerns regarding the sharing of critical customer information to relevant institutions during an emergency.

Lastly, TLSC encouraged the commission to hold further meetings and workshops similar to the hearing on other rulemakings related to emergency preparedness.

Commission Response

The commission is engaged in a wide array of rulemakings and policy projects related to the winter storm and will continue to hold hearings and workshops as appropriate.

Proposed §25.53(a) - Applicability

Proposed subsection (a) makes §25.53 applicable to each electric utility, transmission and distribution utility, power generation company (PGC), municipally owned utility, electric cooperative, and retail electric provider (REP), and the Electric Reliability Council of Texas (ERCOT). Proposed subsection (a) also clarifies that the term "entity" as used in proposed §25.53 is used in reference to the entities subsection (a) lists.

TPPA recommended the commission revise subsection (a) to encourage but not require distribution-only MOUs to file EOPs with the commission. TPPA argued that, as proposed, the rule would "present a substantial regulatory burden on distribution-only entities" due to the amount of information required in a specific format. TPPA maintained that the proposed rule would decentralize emergency response and therefore create more confusion during an emergency as smaller MOUs may be forced to create utility-specific EOPs rather than utilize existing city-wide EOPs. Lastly, TPPA stated that distribution-only MOUs are served by transmission entities that are required to file an EOP, which would address the commission's grid reliability concerns as transmission utilities are "most responsible for emergency response" and therefore the entities that should bear "the regulatory and administrative burden" imposed by the proposed rule.

Commission Response

The commission declines to remove the requirement for distribution-only MOUs to file EOPs with the commission. Tex. Util. Code §186.007 requires MOUs, including distribution-only MOUs, as well as other types of entities listed under subsection (a) of the adopted rule to file EOPs with the commission. A distribution-only MOU is an essential part of the electric grid for the customers it serves. Therefore, the commission must have the ability to analyze a distribution-only MOU's EOP to make an adequate determination under Tex. Util. Code §186.007 regarding the ability of the electric grid to withstand extreme weather events.

Definition of "Entity"

TCPA, ARM, and OPUC recommended the last sentence of subsection (a) stating "The term 'entity' as used in this section refers to the above-listed entities" be deleted, and that the term "entity" be defined in subsection (b). ARM stated entities that share a parent company should be permitted to file a single EOP, with shared and unique sections specified.

Commission Response

The commission agrees with TCPA, ARM, and OPUC that a definition of "entity" should be added to subsection (b) and revises the subsection accordingly. The commission agrees with ARM's recommendation regarding duplicative requirements among commonly-owned entities, but finds that the issue is more appropriately addressed in subsection (c).

Proposed §25.53(b)(1) - "Annex"

Proposed subsection (b) lists the definitions exclusive to proposed §25.53 that are supplemental to the general definitions under §25.5 that are applicable to Chapter 25 of the Texas Administrative Code.

Proposed subsection (b)(1) defines the term "annex" for use within §25.53 as "a section of an emergency operations plan (EOP) that addresses how an entity plans to respond to the incidence of a specific hazard or threat."

CenterPoint suggested "the incidence of a specified hazard or threat" be replaced with the phrase "specified emergencies" for subsection (b)(1) defining "annex."

Commission Response

In response to CenterPoint's comment, the commission revises the definition of "annex" to refer to "a section of an emergency operations plan (EOP) that addresses how an entity plans to respond in an emergency involving a specified type of hazard or threat."

Proposed §25.53(b)(2) - "Drill"

Proposed subsection (b)(2) defines the term "drill" for use within §25.53 as "an operations-based exercise that is a coordinated, supervised activity employed to test an entity's EOP. A drill may be used to develop or test new policies or procedures or to practice and maintain current skills."

CenterPoint suggested "that is a coordinated, supervised activity employed" be deleted from subsection (b)(2) defining "drill."

Commission Response

The commission disagrees with CenterPoint's recommendation to delete the reference to coordination and supervision in the definition of "drill". Coordination and supervision are essential elements of a drill and distinguish a drill from other activities that support an entity's preparation for emergencies.

Proposed §25.53(b)(3) - "Emergency"

Proposed subsection (b)(3) defines the term "emergency" for use within §25.53 as "any incident resulting from an imminent hazard or threat that endangers life or property or presents credible risk to the continuity of electric service. The term includes an emergency declared by local, state, or federal government; ERCOT; or a Reliability Coordinator that is applicable to the entity."

ARM, CenterPoint, AEP, EPEC, TCPA, Oncor, TNMP, Sharyland, TPPA, SPS, and Entergy generally opposed the proposed definition of "emergency" under proposed subsection (b)(3). TLSC supported the proposed definition of "emergency" in its testimony at the public hearing held on January 11, 2022, which is addressed under the heading for the same. ARM stated that the term "emergency" does not appear elsewhere in PURA or in commission rules and stated that it is not clear what "presents credible risk to the continuity of electric service" means. ARM recommended that for administrative clarity, the commission adopt a similar definition for the term "emergency" as the term "emergency condition", as used in the ERCOT Nodal Protocols. ARM noted that governmental entities are more likely to declare a "disaster" such as for a hurricane, whereas ERCOT or other reliability coordinators are more likely to declare an "emergency" such as an energy emergency alert. ARM recommended clarifying the definition of "emergency" by indicating that not every "disaster" or "emergency" warrants usage of an entity's EOP and revising subsection (b)(3) accordingly. Specifically, ARM recommended the definition be modified to "better specify what may constitute endangerment to the continuity of electric service, with conforming changes to the definition of 'emergency operations plan'".

CenterPoint recommended revising the definition of "emergency" to include "existing or imminent hazards" and to give an entity reasonable discretion in classifying a hazard or threat as an emergency.

AEP and EPEC recommended limiting the proposed definition of "emergency" under (b)(3) "to situations that credibly risk continuity of electric service that also result in an emergency declaration by a local, state, or federal government, RTO, or ERCOT or other reliability coordinator." TCPA commented that the proposed definition of "emergency" under (b)(3) should be revised to include "existing or imminent hazards" and to give an entity reasonable discretion in classifying a hazard or threat as an emergency.

Oncor recommended a utility's EOP be triggered when there is a "system emergency" as defined under §25.5 (relating to Definitions) instead of "when there is a risk of service interruption to a single customer or small group of customers." Subsection 25.5(128) defines "system emergency" as a "condition on a utility's system that is likely to result in imminent significant disruption of service to customers or is imminently likely to endanger life or property." TNMP commented that the definition of "emergency" under (b)(3) improperly includes instances where the "credible risk" of service interruptions is small which are generally handled through a utility's standard service restoration procedures. TNMP argued that EOPs are generally in anticipation of or during significant events such as a hurricane and, like Oncor, recommended the proposed definition be consistent with the definition of "system emergency" under §25.58(128) and, consistent with historical practice, only encompass significant events rather than events that impact only a small number of customers.

Sharyland commented that the phrase "continuity of electric service" as used in (b)(3) was overly broad and any interruption of service, even when very limited or no customers experience outages, could therefore be classified as an "emergency." Sharyland emphasized that EOPs are typically utilized "in response to a credible, imminent threat to a significant portion of the system" which is consistent with the proposed rule and that the proposed rule should "focus on the response to major events that pose significant risks to the continuity of electric service on the grid." Accordingly, Sharyland recommended revising the definition of "emergency" to replace "to the continuity" with "of a significant interruption."

TPPA also commented that the proposed definition of "emergency" under (b)(3) is overly broad as it could feasibly encompass emergencies unrelated to the continuity of electric service and therefore unnecessarily increase the scope of EOPs beyond the intended focus on electric grid stability. Like Sharyland, TPPA expressed concern that the proposed definition "could be read to apply to incidental, limited, and brief interruptions of service that do not result from or cause emergency conditions." Accordingly, TPPA provided draft language striking "endangers life or property from the proposed definition of "emergency" and adding the term "sustained" prior to "continuity of electric service.

TPPA further recommended the term "emergency" be limited to "an emergency or disaster declared by local, state, or federal government; ERCOT; or a Reliability Coordinator that is applicable to the entity." TPPA argued that government entities "will declare states of emergency or disaster as appropriate" and that the commission should not list other events outside of that scope. TPPA noted that the language in the current version of §25.53 includes, but is not limited to, that circumstance. SPS also commented that the definition of "emergency" under subsection (b)(3) was overly broad and that an "emergency" for the same reasons as TNMP with the additional qualifier that the term be confined to emergency declarations "by entities empowered to coordinate regional or state-wide responses to such event." Specifically, SPS expressed that the focus of the EOP and this rulemaking is to "address significant, material threats to reliability" and that the rule should not contemplate emergencies that do not involve a threat to grid reliability. SPS extended this rationale to its comments regarding subsection (g) and provided draft language for proposed subsection (b)(3) replacing "the term includes" with "that results in".

Entergy also requested that the commission replace the use of the term "incident" with the defined term "emergency" under subsection (b)(3), as defined by AEP, where applicable as the term "incident" is undefined.

Commission Response

The commission revises the definition of emergency to clarify that, for purposes of this rule, whether an emergency exists for a particular entity depends on how a situation would impact that entity. A key factor in an entity's preparation for emergencies is the process and standards by which it determines whether an emergency exists.

The commission moves the reference to continuity of electric service from the definition of "emergency" to the definitions of "hazard" and "threat" because those terms are intended to cover all types of emergencies. Additionally, in response to comments that the term "emergency" should not include all credible risks to the continuity of electric service, the commission revises the definition of emergency to limit it to a hazard or threat that is sufficiently imminent and severe that an entity should take prompt action to prepare for and reduce the impact of harm that may result from the hazard or event. Furthermore, although the definitions of hazard and threat are comprehensive, the rule requirements for information on specific types of emergencies to be included in an EOP are limited to those that could readily cause a significant disruption of electric service. Entities are encouraged to address additional types of emergencies not otherwise required in the EOP.

Additionally, the definition of emergency expressly refers to an emergency declared by local, state, or federal governments; ERCOT; or another reliability coordinator designated by the North American Electric Reliability Corporation (NERC). However, the defined term is limited to such a declared emergency that is applicable to the entity. An entity must exercise judgment to determine whether any such declaration or situation referred to by another designation, such as a disaster, constitutes an emergency under its EOP.

Proposed §25.53(b)(4) - "Emergency Operations Plan"

Proposed subsection (b)(4) defines the term "emergency operations plan" for use within §25.53 as "the plan and attached annexes, maintained on a continuous basis by an entity, intended to protect life and property and ensure continuity of adequate electric service in response to an emergency."

Enbridge opposed the inclusion of "providing adequate electricity during an emergency" in the definition of "emergency operations plan" under proposed subsection (b)(4). Enbridge argued that EOPs are not "intended to establish performance standards" and as such are not within the scope of the proposed rule. Enbridge emphasized that EOPs are intended to address "potential threats to life or property," prioritize safety of personnel, and preserve or restore the generation resource. Enbridge commented that the proposed rule inappropriately requires a specific performance standard that would distract from the objectives of an EOP and provided draft language striking "and ensure continuity of adequate electric service" from the proposed definition.

TCPA agreed with the intent of the proposed definition of "emergency operations plan" under subsection (b)(4) but expressed that each entity has limited control over the electric grid and that it is impossible to "ensure" continuity of electric service during an emergency. Consistent with its recommendations for subsection (b)(3) defining "emergency" ARM suggested that for administrative clarity, the commission adopt a similar definition for the term "emergency operations plan" under proposed subsection (b)(4), as the term "emergency condition" as used in the ERCOT Nodal Protocols.

Commission Response

The commission deletes the definition of "emergency operations plan" under proposed subsection (b)(4), because it is unnecessary. The rule contains various provisions that define an emergency operations plan. The commission moves the requirement that the plan be maintained on a continuous basis to adopted subsection (c)(3).

Proposed §25.53(b)(5) - "Hazard"

Proposed subsection (b)(5) defines the term "hazard" for use within §25.53 as "a natural, technological, or human-caused condition that is potentially dangerous or harmful to life, information, operations, the environment, or property."

TCPA recommended proposed subsection (b)(5) be deleted but, if the commission declines to do so recommended striking "information, operations, the environment" from the proposed definition of "hazard" and after "property" add "or the continuity of electric service."

ARM recommended the definition of "hazard" under proposed subsection (b)(5) be aligned with the definition of "emergency" under proposed subsection (b)(3) as each definition includes "references to 'information,' 'operations,' and 'the environment,' but not the continuity of electric service." ARM noted that such terms are both expansive and restrictive as they may require EOPs to include information that is not relevant to system or grid reliability, yet also limit the scope of hazards contemplated by EOPs. ARM therefore recommended that the term "hazard" instead be left to its plain meaning and that proposed subsection (b)(5) should be deleted from the proposed rule.

Commission Response

The commission declines to delete the definition of "hazard". The ordinary meaning of hazard lacks sufficient precision for the rule. In addition, the definition of "hazard" under adopted subsection (b)(5) along with the definition of "threat" under adopted subsection (b)(6) and revised definition of "emergency" under adopted subsection (b)(3) are intended to comprehensively define situations that an EOP should address. The commission revises the definition of "hazard" to include a "condition that is potentially dangerous or harmful to the continuity of electric service."

Proposed §25.53(b)(6) - "Threat"

Proposed subsection (b)(6) defines the term "threat" for use within §25.53 as "the intention and capability of an individual or organization to harm life, information, operations, the environment, or property."

TCPA recommended proposed subsection (b)(6) be deleted but, if the commission declines to do so recommended striking "information, operations, the environment" from the proposed definition of "threat" and after "property" adding "or the continuity of electric service." Consistent with its comments regarding subsection (b)(5) defining "hazard", ARM further recommended proposed subsection (b)(6) defining "threat" be deleted and the term left to its plain meaning.

Commission Response

Consistent with the discussion of the definitions of "emergency" and "hazard", the commission declines to delete the definition of "threat." The commission revises the definition of "threat", adding "including harm to the continuity of electric service" to the end of the definition.

Proposed §25.53(c) - Filing requirements

As a prefatory note, due to an inconsistency in the numbering for subsection (c) between the proposed version of the rule filed on the commission's website and the version of the rule published in the Texas Register, the headings, responses and other references to "proposed" provisions of (c) are referring to the numbering used in the version of the rule filed on the commission's website.

Proposed subsection (c) details the filing requirements for EOPs by an entity under this section.

LCRA requested the commission clarify the procedure for entities to file unredacted EOPs and "the applicability of the commission's existing procedural rules for the filing of confidential or voluminous materials." LCRA also urged the commission to establish a secure method for required parties to file unredacted EOPs that is only accessible to relevant commission staff and meets the industry leading cybersecurity and encryption specifications. Until that is established, LCRA recommended that the commission allow required entities to file confidential information in their EOPs with Central Records under §22.71(d) (relating to Confidential material). LCRA also requested that the rule clarify that the portions redacted or withheld by the filing party of the EOPs are confidential and not subject to public disclosure.

Commission Response

The commission declines to make the changes recommended by LCRA because they are not relevant to the adopted rule, which only requires the submission of a redacted copy of an entity's EOP to the commission. Under adopted subsection (c)(3)(E), an entity must make its unredacted plan available to commission staff at a designated location upon request and must file a complete plan with confidential portions removed for public inspection in accordance with Tex. Util. Code §186.007(f).

The commission's procedural rules regarding electronic filings and confidential filings are currently under review. As a practical matter, the commission's website is presently able to accept both public and confidential filings electronically.

In the alternative LCRA requested that the commission allow required entities to keep their unredacted EOPs available for inspection by appropriate commission staff at a designated location in Austin, as allowed in §22.144(h) (relating to requests for information and requests for admission of facts) for production of voluminous materials.

Commission Response

The commission agrees with LCRA's alternative suggestion and reverts back to the language of the repealed version of this rule requiring an entity to make its unredacted plan available to commission staff at a location designated by commission staff under adopted subsection (c)(3)(E).

City of Houston requested that the summary after-action reports required under this subsection include details on critical infrastructure that was partially served by the provider, why it was not fully served, and changes that will address the issue. City of Houston further commented that this portion could be included in a confidential version of the after-action report and this information should be directly communicated to the critical infrastructure owner after such an event.

Commission Response

The intent of the rule is to require an entity to develop, maintain, and update its EOP on a regular basis, not to create a permanent forum for an entity to receive feedback on any individual emergency response. Therefore, the commission removes the proposed requirement that an entity provide an updated EOP 30 days after an activation of its EOP. The adopted rule instead requires an entity to capture its lessons learned from activations of its EOP during the previous calendar year, then provide a revised plan reflecting material changes in how it will respond to an emergency. Accordingly, City of Houston's request regarding summary after-action reports is now moot. The commission notes that under adopted subsection (g), commission staff may require an entity to provide an after-action report following activation of an entity's EOP.

OCSC supported the full disclosure of unredacted EOPs and recommended the commission impose minimum requirements on any utility making a claim of confidentiality "to show specifically why each component of the filing is confidential" in the interest of providing as much useful information to customers, particularly regarding communications plans. In addition, OCSC commented that it is crucial for the industry to align with ERCOT on emergency communications. Additionally, OCSC urged the commission to utilize information and data from filed EOPs for future policymaking efforts to maximize the benefit of agency efforts for the industry and consumers.

Commission Response

The commission disagrees with OCSC's comments in favor of full disclosure of unredacted EOPs. An EOP is a written plan detailing an entity's processes and actions utilized for response to emergencies and for safeguarding health, property, and continuity of service in such events. It is not, as OCSC suggests, a "tool for customers." The inadvertent release of confidential information in an EOP could represent a threat to grid security and reliability. In consideration of other commenters' proposals and recommendations, the commission removes the requirement to file unredacted plans with the commission under adopted subsection (c)(1)(A) and instead permits entities to file a summary of its EOP and a complete EOP with confidential portions removed with the commission. The commission agrees with OCSC that the commission's review of EOPs may provide valuable insights that inform future policy initiatives.

Proposed §25.53(c)(1) - Filing deadline and annual filing

Proposed subsection (c)(1) requires an entity to file an EOP by April 1, 2022, and beginning in 2023, to annually file an EOP by February 15 of each year in the manner prescribed by the commission.

ARM, TCPA, GVEC TEC, CenterPoint, EPEC, AEP, SPS, Oncor, TNMP, ETEC, and Enbridge expressed concern with the deadlines proposed and requested more time to file EOPs. ARM expressed concern for the initial April 1 deadline and the February 15 annual filing deadline. Because both deadlines correspond with other reporting obligations and deadlines for entities covered in the rule, ARM stressed that the standing April and February deadlines would be impractical for filing entities. ARM commented that a June 1 deadline is a part of entities' compliance calendar "and naturally aligns with the start of the summer peak season." As such, ARM recommended moving the initial deadline to file an EOP June 1, 2022, or 120 days after the rule becomes effective, and moving the annual filing deadline to June 1. TCPA also recommended this change but specified the change should be made to whichever timeline is later to remain consistent with the start of peak load seasons. GVEC and CenterPoint also recommended extending the initial filing deadline to June 1, 2022. Enbridge recommended a 6-month compliance deadline from rule adoption. Similarly, EPEC recommended a 120-day compliance deadline from rule adoption, while AEP, Oncor, TNMP and SPS recommended a 90-day deadline from the same.

Commission Response

The commission extends the initial filing deadline to April 15, 2022 to provide entities with more time to comply with the rule in recognition of the commission considering the rule for final adoption at a later date than projected when the April 1, 2022 deadline was proposed.

Additionally, to avoid competing with other regulatory reporting deadlines set for February 15 each year, the commission agrees to move the annual emergency operations plan reporting deadline to March 15 by adopting subsection (c)(3). The commission declines to establish June 1 as the future-year annual reporting deadline as that does not provide the commission sufficient time to analyze plans and submit subsequent reports to the Legislature.

CenterPoint commented that proposed §25.53 exceeds the requirements of SB 3's amendments to Tex. Util. Code §186.007, which states that the commission shall require entities to file an updated plan if it finds that a plan does not contain sufficient information to determine if the entity can provide adequate electric services. CenterPoint notes that the commission "has not made any findings since Senate Bill 3's effective date that an applicable entity's currently filed EOP 'does not contain adequate information to determine whether the entity can provide adequate electric services,'". CenterPoint indicated that it will follow the rule as adopted, but requests additional time to compile a new EOP.

Commission Response

The commission disagrees with CenterPoint's contention that the commission must find an EOP inadequate before requiring the entity to file an updated EOP. If, indeed, an entity's currently filed EOP adequately meets the requirements of this rule, that entity is not required to compile a new EOP. As discussed under the General Comments heading, existing plans that contain the information required in the rule will satisfy the rule's requirements, as will a collection of pre-existing documents, such as specific procedural manuals, that each contain portions of the required information. The commission does not require an entity to redraft or reformat its emergency operations plans. Only emergency operations plans that do not contain adequate information must be updated for purposes of the rule.

As a separate matter, the commission extends the initial filing deadline to June 1, 2022 for MOUs in recognition of the fact that the version of §25.53 that is currently being repealed did not apply to MOUs, and these entities may have to generate a completely new EOP.

AEP, CenterPoint, and LCRA commented that because each entity is required to file an updated EOP when a significant change is made, the annual EOP requirement should be removed from the rule as "the costs of an annual EOP filing outweigh the benefits." Like other commentors, ETEC recommended that entities only file new EOPs when substantial changes have been made. ETEC suggested that the annual affidavit remain for attesting to proper and continued training and allowing entities the option to attest that the previously filed EOP is unchanged instead of the annual filing requirement.

TEC similarly proposed changing the rule language to remove the automatic annual filing requirement. TEC argued that EOPs should only be required to be filed annually if the entity "activated its EOP" and needs to include an after-action report.

TPPA interpreted an EOP as "the collation of an entity's emergency procedure documents into a single document, using a template that matches, on a 1:1 basis." Therefore, due to the initial EOP deadline, TPPA recommended modifying the rule language to require entities to submit their current, existing EOPs. This would allow commission staff, or a consultant, to review EOPs and provide entities with analysis and recommendations as necessary. TPPA stated that such a process would be effective, targeted and provide actionable steps without creating substantial regulatory burdens. For the longer term, TPPA recommended allowing flexibility for non-substantive changes to the form of the filing, if the filing clearly indicates where the information can be located.

Commission Response

The commission agrees with the comments from AEP, CenterPoint, TEC, LCRA and TPPA that the intent of the rule is to require an entity to develop an EOP with certain minimum requirements, maintain that EOP over time, and regularly revise the EOP to reflect material changes to how the entity would respond to a future emergency. The commission also agrees that filing an EOP can be burdensome, so the commission removes the requirement that an entity file an updated EOP when a significant change is made. Under adopted subsection (c)(3), the commission adopts requirements related to regular updates to an entity's EOP. Each year by March 15, an entity must either file a revised version of its EOP or provide an attestation that no material changes were made to the EOP in the previous calendar year. The adopted paragraph also requires an entity to update the information filed with its EOP if commission staff determines that the entity's EOP does not contain sufficient information to assess the entity's preparedness. Because the commission changes the requirement and circumstances under which an entity must provide a revised EOP, the commission deletes proposed subsection (c)(4)(D).

The commission agrees with TPPA regarding flexibility and form of the EOP document, as discussed in greater detail under the General Comments header above.

ARM requested that entities that share a parent company be permitted to file a single EOP. ARM also requested further specificity in the rule for which sections apply to commonly owned entities and which apply to particular entities to "minimize administrative burdens and increase the efficiency" for reporting entities.

Commission Response

The commission agrees with ARM's recommendation to permit joint filings of an EOP in certain circumstances. The commission revises the rule to allow for joint filing of an EOP and other documents required by the rule separate from the EOP, as well as the combining of annexes in certain circumstances. A jointly filed EOP must clearly identify which portions of the plan apply to individual entities and fulfill the requirements of the rule for each entity. Each subsidiary entity must either be subject to the parent EOP or have its own standalone plan.

The commission also amends subsection (c)(1) to explicitly indicate that each individual entity is responsible for its obligations under the adopted rule and further states that an entity filing a joint EOP or joint document separate from the EOP is also responsible for the contents of a joint filing in addition to the individual entity. Therefore, if a joint EOP or joint documents are deficient with regards to a specific individual entity, the filing entity and the specific individual entity are both responsible for the deficiencies. This requirement is intended to ensure joint EOPs and documents separate from the EOP are fully compliant with the rule and that the commission has recourse to address deficiencies in filings.

In conjunction with the amendment to subsection (c)(1) described above, the commission adds subsection (c)(1)(E) and (c)(1)(F) to permit joint filing of an EOP and documents separate from an EOP by an entity that has control over other entities. Such joint filings would satisfy the filing obligations required under subsection (c)(1). The commission refrains from specifically defining "control" as the term in this context is best left to its plain meaning to maximize flexibility for entities in filing and compiling required documents and for the commission in reviewing and requiring updates under the rule. The commission also adds subsection (c)(1)(G) which permits an entity that must file similar annexes under subsection (e) for different facility types to file a combined annex as part of its EOP. The commission also adds subsection (c)(3)(F) which mirrors the requirements of subsection (c)(1)(E), (c)(1)(F), and (c)(1)(G) for updated filings and combined annexes.

ETEC expressed concern over the reporting period in the after-action report because for "an event starting on December 31, for example, (to) be included in the February 15 filing" entities would not have enough time to assess a major event in such a short period. Thus, ETEC recommended changing the reporting period to address events that occurred during the twelve months prior to October of the previous year. In the alternative, ETEC suggested moving the February 15 deadline to April 1 to cover events that occurred during the previous calendar year.

Commission Response

The commission declines to change the rule based on ETEC's comment. In ETEC's hypothetical, if an event begins on December 31, the entity will not have revised the plan as a result of that event prior to the start of the next calendar year. So, under adopted subsection (c)(3)(A), if an entity makes a material change to its plan in the previous calendar year, it must file with the commission an executive summary describing the changes made, updating any references to specific sections and page numbers that correspond with the rule's minimum requirements; file with the commission its complete, revised plan with confidential portions removed; and submit the revised, unredacted plan to ERCOT by March 15.

TEC noted that the commission has limited jurisdiction over retail electric distribution cooperatives that do not operate a transmission facility or generation resource. Therefore, commission staff's authority in the rule to review and require changes should exclude retail electric distribution cooperatives. Similarly the requirement for drills and other operational standards should be excluded. Alternatively, the rule should be modified to report-only requirements for such organizations.

Commission Response

The commission disagrees with TEC's analysis of the commission's jurisdiction. Although PURA §41.001 states that with regards to the regulation of electric cooperatives, the provisions of Chapter 41 control over any other provision of Tex. Util Code, Title II, the statutory authority for this rule comes from Tex. Util. Code §186.007, which is not in Tex. Util. Code, Title II. Tex. Util. Code §186.007 (a-1) explicitly applies to electric cooperatives.

Tex. Util. Code §186.007 requires the commission to evaluate the preparedness of the industry to respond to emergencies, and the information required under this section is required for this evaluation. For example, the commission requires each entity listed under adopted subsection (a) to conduct a drill as a means to self-evaluate its own level of preparedness, the results of which are reflected in material changes to the EOP filed with the commission.

SPS commented that the filed version of an EOP should be a summary version with the removal of confidential and security sensitive information.

In accordance with the concerns shared under heading(c)(1)(A), Oncor and TNMP provided draft language for subsection (c)(1). Oncor's proposed language required an entity to publicly file an EOP in its entirety with confidential portions redacted or removed within 90 days of rule adoption and otherwise make available a complete unredacted copy of the EOP available to the commission for inspection in Austin. TNMP provided similar proposed language but instead required a comprehensive summary to be filed publicly, rather than an EOP in its entirety with confidential portions redacted or removed.

ARM commented that requiring entities to file unredacted EOPs in their entirety to both the commission and ERCOT as required under proposed subsection (c)(1)(A) and (c)(1)(B) respectively is needlessly duplicative. Instead, ARM recommended requiring parties to file a complete unredacted EOP with ERCOT and a redacted public EOP with the commission to ensure preparedness and rule compliance without the burden of duplicative reporting requirements.

Commission Response

The commission agrees with many of the concerns expressed by commenters above and changes the rule to require an entity to submit to ERCOT its complete, unredacted plan; file with the commission an executive summary describing the changes made, updating any references to specific sections and page numbers that correspond with the rule's minimum requirements; and file with the commission its complete, revised plan with confidential portions removed.

Proposed §25.53(c)(1)(A) - Filing with the commission

AEP, CenterPoint, EPE, LCRA, Oncor, TNMP, SPS, TCPA, and Entergy opposed the inclusion of subsection (c)(1)(A) in the proposed rule due to confidentiality concerns related to the public filing of an unredacted EOP. SPS, TPPA and TNMP argued that the proposed rule conflicts with statutory language in Tex. Util. Code §186.007 which states "the plan shall be provided to the commission in a redacted form for public inspection with the confidential portions removed. An entity within the ERCOT power region shall provide the entity's plan to ERCOT in its entirety." CenterPoint, AEP, EPE, Oncor, Entergy, SPS, and CenterPoint each argued that, despite being filed confidentially, the information risked being disclosed under the Texas Public Information Act (TPIA).

Entergy and SPS each contended that requesting a TPIA exemption is costly, burdensome, and requires action on short notice. Entergy argued that a utility should not be forced to defend an exemption from disclosing EOP customers that may harm customers. SPS argued that these exemption requests involved highly technical matters which the Attorney General and the courts may not be able to fully appreciate.

EPE, Oncor, SPS, and TCPA argued that EOPs contain information that, if disclosed, could be used by those planning an attack on critical infrastructure. TCPA cautioned that "public transparency must be tempered with securing sensitive or critical information regarding a utility's electric system." Oncor and EPE argued that portions of an EOP are designated as Critical Energy/Electric Infrastructure Information by the Federal Energy Regulatory Commission, and that the proposed rule might conflict with federal law.

CenterPoint, LCRA, and TCPA each recommended the commission revise the rule to ensure that any redacted information that was required to be filed was protected, to the maximum extent possible, from disclosure under the TPIA. CenterPoint argued that the "cyber security annex" and "physical security incident annex" is covered by TPIA §552.101's confidential information exception to the public information disclosure requirement under TPIA §552.021. CenterPoint provided draft language for proposed subsection (c)(1)(A) to specify that an unredacted EOP in its entirety must be filed confidentially under commission rule §22.71(d) (relating to Filing of Pleadings, Documents, and Other Materials), and, since it contains information related to critical infrastructure under Tex. Gov't Code §421.001(2), is therefore exempt from public disclosure under the TPIA. Alternatively, LCRA requested that the commission modify proposed subsection (c)(1)(A) by adding "The redacted portions of the EOP are considered confidential information and are excepted from public disclosure." to the end of the provision. TCPA proposed that unredacted EOPs should be submitted to ERCOT rather than the commission and that these EOPs should be designated as "protected information" under §25.362 (relating to ERCOT Governance) and ERCOT Nodal Protocols.

EPE, Oncor, TNMP, SPS, and AEP recommended that filing a comprehensive summary of the EOP be considered an acceptable substitute for filing full unredacted EOPs with the commission. SPS and EPE noted that this was consistent with existing §25.53(b), which allows a utility to submit either an entire EOP or a comprehensive summary. EPE also requested an explanation of the additional benefit gained by not allowing a comprehensive summary in lieu of a submission of a complete EOP. EPE further stated that if the commission requires the filing of entire EOPs, instead of comprehensive summaries, additional time would be needed to comply, as combining procedures into one comprehensive document will be time consuming.

TPPA, AEP, Oncor, and TCPA proposed that, as an alternative to requiring an unredacted copy to be filed with the commission, for portions of a plan that are designated as confidential, entities be required to provide the unredacted plan for inspection. TPPA recommended in-camera inspection by the commission. AEP recommended inspection by commission staff at the entity's main office. Oncor recommended "a location in Austin."

Commission Response

The commission agrees with commenter concerns regarding the importance of protecting the confidentiality of sensitive information contained in EOPs. The commission modifies the rule to require entities to file with the commission an executive summary that, among other things, describes the contents and policies contained in the EOP. Entities must also file a complete copy of its EOP with all confidential portions removed and make its unredacted EOP available in its entirety to commission staff on request at a location designated by commission staff. Additionally, an entity with operations within the ERCOT power region must submit its unredacted EOP in its entirety to ERCOT, and ERCOT must designate the unredacted EOP as Protected Information under the ERCOT Protocols.

Proposed §25.53(c)(1)(B) - Filing with ERCOT

Proposed subsection (c)(1)(B) requires an entity operating within the ERCOT power region to file an unredacted EOP in its entirety with ERCOT.

CenterPoint, LCRA and TNMP opposed the inclusion of proposed subsection (c)(1)(B) unless justification is provided for ERCOT to review other market participants' EOPs and to prevent conflict between commission and ERCOT rules. TNMP also claimed that proposed subsection (c)(1)(B) is duplicative because "ERCOT Nodal Operating Guide 3.7(6) already requires a Transmission Owner to submit to ERCOT by each February 15, its emergency operations plan to mitigate operating emergencies." CenterPoint offered revised language for proposed subsection (c)(1)(B) to reflect that filed unredacted EOPs with ERCOT are protected information in accordance with the ERCOT Nodal Protocols. CenterPoint provided draft language adding "and ERCOT shall designate and treat such unredacted EOPs as Protected Information under section 1.3 of the ERCOT Nodal Protocols" to the end of proposed subsection (c)(1)(B).

Commission Response

The commission disagrees with CenterPoint, TCPA, and TNMP's recommendation to delete proposed subsection (c)(1)(B). Tex. Util. Code §186.007(f) requires an entity within the ERCOT power region to provide its plan to ERCOT in its entirety. The commission agrees with CenterPoint's recommendation to add language regarding the confidentiality of plans filed with ERCOT and adopts subsection (c)(1)(C) accordingly.

Proposed §25.53(c)(1)(C) - After-action report

Proposed subsection (c)(1)(C) requires an entity, beginning in 2023, to include in its annual EOP, for each incident in the prior calendar year that required the entity to activate its EOP, a summary after-action report that includes lessons learned and an outline of changes the entity made to the EOP as a result of the incident.

TPPA, AEP, LCRA, Oncor, TNMP, Enbridge, and TCPA opposed the inclusion of subsection (c)(1)(C) and recommended the provision be deleted.

TPPA contended that requiring an entity to provide an outline of changes to its EOP after an emergency event is better covered by proposed subsection (c)(4)(C), requiring a summary of lessons learned, is best accomplished by briefing the commission directly, and a set of after-action reports could form a blueprint for a bad actor and otherwise provide no benefit to the commission.

Similar to TPPA, AEP and LCRA recommended deleting proposed subsection (c)(1)(C) and moving the proposed requirement to another section. LCRA specifically recommended moving proposed subsection (c)(1)(C) to proposed subsection (c)(4)(C).

Oncor and TNMP opposed the inclusion of subsection (c)(1)(C) in the proposed rule if the term "emergency" is interpreted to include more than "system emergencies" because the requirement would be administratively burdensome to implement. Otherwise, if the term "emergency" is not interpreted in that manner, then Oncor and TNMP do not oppose the rule requirement. Enbridge expressed concern for the "lessons learned" requirement of proposed subsection (c)(1)(C) as such information is "highly commercially sensitive" and would result in harm to the entity and would inhibit an entity's ability to earnestly analyze its own responsiveness to emergency events.

TCPA opposed the requirements under proposed subsection (c)(1)(C) and recommended it be deleted. Because there are several incidents every year in which an entity uses procedures from its EOP which do not result in material information to report and SB3 does not require information described in this provision, TCPA stated that the requirement to file updated EOPs "will adequately address the issue that the PFP is signaling in proposed subsection (c)(1)(C)." Further, TCPA explained that requiring entities to file after-action reports after every incident, along with the other requirements, would be burdensome. If the commission is to keep such requirements TCPA requested that the rule be changed to only require a summary report of each type of emergency including lessons learned and any resulting EOP changes instead of a report per incident.

Commission Response

In response to multiple commenters' suggestions, the commission deletes the after-action reporting requirement under subsection (c)(1)(C) and replaces it with adopted subsection (c)(3)(A) and (c)(3)(B). Under adopted subsection (c)(3)(A), if an entity has made a material change to its plan in the previous calendar year as the result of an activation, the entity must make a filing by March 15. This filing must include an executive summary that describes the changes made and updates any references to specific sections and page numbers that correspond with the rule's minimum requirements and the complete, revised plan with confidential portions removed. The entity must also submit to ERCOT the revised, unredacted plan. If an entity did not revise its emergency operations plan in the previous calendar year as a result of an activation of its plan, the entity must file an attestation that the plan has not changed, updates to the list of emergency contacts, and the affidavit required under subsection (c)(4)(C). An entity is also required to provide an after-action report upon request, as detailed in adopted subsection (g).

ETEC, AEP, SPS, and ARM recommended changes to proposed subsection (c)(1)(C) if the commission does not adopt their proposals to delete the provision.

ETEC appreciated the need for the commission to have information from utilities such as after-action reports, mitigation plans, and affidavits regarding emergency events but was concerned that requiring entities to file these items with an EOP as proposed may clutter and reduce the effectiveness of the EOP. In ETEC's view, such reports do not serve the objective of an EOP to guide personnel during an emergency. Therefore, ETEC requested that proposed subsection (c)(1)(C) be amended to allow separate filings for EOPs and after-action reports distinct from EOP filings. ETEC remarked that an EOP's key purposes are "assignment of authority during an emergency, and clear organizational relationships" and therefore extraneous information should be excluded.

EPEC and ARM expressed concern that requiring an after-action report after every incident would be overly broad. EPEC proposed changing the after-action reporting requirement to only after significant incidents, such as after "emergencies" as defined in proposed subsection (b)(3). ARM recommended changing the report required under proposed subsection (c)(1)(C) to only require a general overview of the prior year's activity.

AEP and SPS suggested narrowing the circumstances requiring an after-action report. AEP explained that sometimes their EOP is activated in response to a weather event that is not unusual or extreme and such a case would not "necessarily raise novel issues warranting a review and report of the event." Because of this, AEP recommended that after-action reports should only apply to incidents when an entity activates its EOP in response to an official emergency declaration by local state, or federal government, ERCOT, or a reliability coordinator. SPS recommended changing the language of proposed subsection (c)(1)(C) from "incident" to "emergency" and also recommended amended language so EOP summaries may be filed in lieu of an entire unredacted EOP. SPS explained that rule language should be limited to emergency events as declared by appropriate governmental and regional coordinator authorities.

ARM recommended adding the phrase "if any" in the rule to clarify that an after-action report is only required if an incident occurred during the prior year.

Commission Response

The commission agrees with the concerns addressed by commenters and removes proposed subsection (c)(1)(C) from the rule. However, an entity will continue to be required to provide an after-action report on request, as detailed in adopted subsection (g).

Consistent with its general recommendations for the proposed rule, OPUC requested that costs incurred by an entity implementing its EOP in response to a prior incident be included as part of the reporting requirement under proposed subsection (c)(1)(C).

Commission Response

The commission declines to adopt OPUC's proposed rule language. The monetary cost of EOP implementation does not bear on the intention of the rule to ensure emergency preparedness of entities to protect life, property, and continuity of service.

Proposed §25.53(c)(3) - New entity EOPs

Proposed subsection (c)(3) requires a person seeking registration as a PGC or certification as a REP to file an EOP at the time of its application for registration or certification, and, if operating in the ERCOT power region, to file the EOP with ERCOT within 10 days of approval.

AEP observed that there is no subsection (c)(2) and recommended renumbering the paragraphs in subsection (c).

Commission Response

The proposed language filed on the commission's website contained a numbering error that was corrected for the version published in the Texas Register. For clarity, references to the proposal in this preamble use the numbering from the version of the proposed rule filed on the commission's website. The commission has corrected this numbering issue for the adopted rule.

CenterPoint provided language for proposed subsection (c)(1)(C), relisted in CenterPoint's redline as subsection (c)(2). CenterPoint's proposed language would require an entity to file a summary after-action report and an affidavit affirming that the entity's currently filed EOP includes all material updates and changes annually on June 1, among other changes.

Commission Response

As noted under heading (c)(1), the commission changes the annual reporting deadline to March 15 in order to address commenters' concerns while still allowing the commission sufficient time to analyze the plans and prepare its report to the Legislature. The commission declines to reorganize subsection (c)(1)(C) into new subsection (c)(2) as recommended by CenterPoint.

CenterPoint recommended adding the phrase "after June 1, 2022" to clarify that this requirement only applied to persons who seek certification or registration after June 1, 2022. Because such persons would not be considered entities on June 1, 2022, CenterPoint explained that these persons cannot be required to file EOPs by June 1, 2022.

Commission Response

The commission disagrees with CenterPoint. The intention of the rule is to ensure all entities create and maintain an EOP. Accordingly, adopted subsection (c)(2) explicitly the requires that to register as a PGC or certify as a REP, an applicant must submit to ERCOT its unredacted EOP and file with the commission an executive summary and complete copy of the plan with the confidential portions removed.

Proposed §25.53(c)(4) - Updated filings

Proposed subsection (c)(4) requires an entity to file an updated EOP with the commission within 30 days under the circumstances detailed in proposed subsection (c)(4)(A) through (c)(4)(D), which will be discussed in more detail under the corresponding headers below.

CenterPoint, LCRA, TEC, TPPA, TNMP and SPS opposed the requirement to refile EOPs under proposed subsection (c)(4). CenterPoint requested that an entity only be required to update its EOP within 30 days after the entity makes a significant change to its currently filed EOP. LCRA agreed that it should take a significant change to an EOP to require an entity to refile it with the commission, including, as an alternative to providing after action reports as a part of an EOP, when a significant change has been made to an EOP in response to an after-action report. TEC recommended removing the re-filing requirement altogether or alternatively excluding cooperatives from the refiling requirements.

Commission Response

The commission makes several changes to adopted subsection (c)(3) to address the concerns raised by comments to proposed subsection (c)(4) concerning when an entity must refile its EOP. First, the commission retains the requirement that an entity must update its EOP if commission staff determines that the entity's EOP on file does not contain sufficient information to determine whether the entity can provide adequate electric service through an emergency as stated in adopted (c)(3)(F). Next, the commission removes the remaining proposed updated and annual filing requirements from the rule, as discussed below, in favor of requiring a single annual filing under adopted (c)(3). An entity must file a complete EOP for this annual filing if it made a change to its EOP in the previous calendar year that would materially affect the way the entity would respond to an emergency. Such an entity must file with the commission an executive summary and a complete, revised copy of the plan with the confidential portions removed, and submit to ERCOT an unredacted revised EOP in its entirety. An entity that has not made a significant change to its EOP in the previous calendar year must attest to the same and file an updated affidavit and contact information.

To maintain consistency with the initial filing requirements under adopted subsection (c)(1) the commission adds several corresponding provisions for updated filings under (c)(3) including adopted subsection (c)(3)(D) regarding the confidentiality of unredacted revised plans submitted to ERCOT and (c)(3)(E) regarding the requirement to allow commission staff to review a revised copy of an entity's EOP in its entirety at a location designated by commission staff.

The commission declines to revise the rule to except electric cooperatives from the filing requirements under this section for reasons described under the General Comments heading.

Proposed §25.53(c)(4)(A) - Insufficient information

Proposed subsection (c)(4)(A) requires an entity to file an updated EOP if commission staff determines the entity's EOP does not contain sufficient information to determine whether the entity can provide adequate electric service through an emergency.

Enbridge recommended the deletion of proposed subsection (c)(4)(A) because it provides the commission open-ended discretion "to enforce a performance standard during an emergency, which is not within the scope of this Project."

Commission Response

The commission disagrees with Enbridge that requiring an entity to update an EOP that does not contain sufficient information provides the commission open-ended discretion to "enforce a performance standard" during an emergency. Complete information is required for the commission to assess the ability of the electric grid to withstand extreme weather events in the upcoming year as required by statute. Adopted (c)(4)(A) does not require an entity to file an updated EOP based upon an assessment of its performance under the EOP or the particulars of its contents; only whether it provides information addressing the required topics.

AEP, Enbridge, TCPA, and SPS expressed concern over delegating to commission staff the sole discretion of requiring an entity update its EOP under proposed subsection (c)(4)(A). TPPA and CenterPoint expressed concern that the requirements under proposed subsection (c)(4) do not align with the statutory text of Tex. Util. Code §186.007(b) which grants the authority to require entities to file updated EOPs with the commission and not its staff.

TCPA opposed the inclusion of subsection (c)(4)(A) in the proposed rule, stating that "required updates to EOPs should track statutory requirements requiring a commission order" to comply with Tex. Util. Code §186.007(b). CenterPoint asserted that commission staff "may advise an entity to make an update to its EOP," but if the entity disagrees, commission staff's only recourse would be to initiate a show-cause hearing or file a show-cause motion, so the commission can adjudicate. CenterPoint asserted commission staff does not have the "unilateral authority to force an entity to change its EOP," due to the entity's due process rights. Accordingly, CenterPoint recommended changing the language of proposed subsection (c)(4)(A) to include the phrase "within the time period specified in a commission order" and to reflect that any determination is to be made by the commission and not commission staff. Similarly, AEP recommended adding the qualifier "reasonably" to the rule to allow the option to have the commission make a final determination if parties cannot reach an agreement.

TPPA stated that it appreciated the need to informally communicate and coordinate with commission staff but expressed concern that the communications covered under proposed subsection (c)(4) could "result in simultaneous, conflicting instructions from multiple staffers" and due process concerns. TPPA recommended amending proposed subsection (c)(4) to strike the term "staff" from the provision and add a requirement to provide notice and hearing to an entity for a commission determination requiring an entity to update its EOP. TPPA stressed that developing an EOP is a significant endeavor made more demanding for MOUs due to their direct connection to local government.

Commission Response

The commission does not share TCPA's, CenterPoint's, TPPA's and AEP's concerns regarding allowing commission staff to request updated EOPs. An entity will not be required to change its operations via these provisions, merely update its documentation if it is incomplete. Moreover, there are no due process issues to consider. The commission does not operate by order alone nor does the statute require an order in this case. This is but one of many instances, such as responding to an informal complaint, where an entity is required to follow direction from commission staff to comply with a rule, and just like in those other instances, the entity cannot be issued a penalty or other punitive measure for noncompliance without an opportunity for a hearing in front of the commission.

TPPA's suggestion that the only way to avoid "simultaneous, conflicting instructions from multiple staffers" is to put the question before the commissioners ignores the fact that the organization of the commission is transparent and readily accessible on the commission's website. In the unlikely event that an entity believes that it is receiving conflicting or unreasonable requests to file an updated EOP from commission staff, it can seek clarity by contacting the executive director's office or another member of the commission's leadership team.

SPS and TNMP recommended modifying proposed subsection (c)(4)(A) to allow entities to file a comprehensive detailed summary of its updated EOP instead of filing an updated EOP. TNMP also recommended making a complete unredacted copy of the EOP available to the commission for inspection.

Commission Response

The commission declines to make the changes suggested by SPS and TNMP. An entity is not permitted to submit a comprehensive EOP summary if required by commission staff to update its EOP. Under Tex. Util. Code §186.007(f), a redacted EOP must be submitted to the commission with the confidential information removed. Moreover, the commission declines to allow an entity to file an updated summary of its EOP, because the summary may not adequately or accurately capture the needed information. To analyze EOPs and assess the ability of the electric utility industry to provide adequate service during an emergency, the commission requires a complete picture of an entity's plans to respond to and during an emergency. This requirement is not unduly burdensome as it only requires an entity to update the information, not necessarily submit an entire plan. However, entities within the ERCOT power region must submit this updated information in unredacted form to ERCOT.

TEC proposed changing the review and feedback process in this provision to exclude electric cooperatives that do not operate a transmission facility or generation resource. However, TEC explained that updates due to material changes would still be required.

Commission Response

The commission declines to change the rule as suggested by TEC for the reasons discussed under the General Comments heading.

Proposed §25.53(c)(4)(B) - Commission staff feedback

Proposed subsection (c)(4)(B) requires an entity to file an updated EOP in response to feedback provided from commission staff.

TNMP, CenterPoint, TEC, Oncor, AEP, and SPS opposed the inclusion of proposed subsection (c)(4)(B) in the proposed rule as any update required is already addressed by proposed subsection (c)(4)(A). TNMP recommended subsection (c)(4)(B) be revised to permit filing of a comprehensive detailed summary of its EOP in lieu of a completed unredacted copy but permit the unredacted copy to be available to the commission for inspection.

CenterPoint recommended deletion of proposed subsection (c)(4)(B) because it is vague, ambiguous, and duplicative of requirements already included in proposed subsection (c)(4)(C). Further, CenterPoint commented that commission staff "does not have the unilateral authority to force an entity to change its EOP" as an entity has due process rights.

TEC repeated its recommended edits for proposed subsection (c)(4)(A) for proposed subsection (c)(4)(B). SPS recommended the deletion of this provision as it is subsumed by their edited proposed subsection (c)(4)(A). Further, SPS commented that proposed subsection (c)(4)(B) is concerning as it provides no review process for the affected entities. Enbridge expressed concern over the inclusion of subsection (c)(4)(B) in the proposed rule because it is overly broad and does not provide space for an entity's knowledge regarding their own asset, personnel, and safety programs. Consistent with its opposition to subsection (c)(4)(B), TCPA opposed the inclusion of subsection (c)(4)(B) in the proposed rule, stating that "required updates to EOPs should track statutory requirements requiring a commission order" in order to comply with Tex. Util. Code §186.007(b).

Commission Response

The commission agrees with commenters that proposed subsection (c)(4)(B) is largely duplicative of proposed subsection (c)(4)(A) and deletes the requirement in the adopted rule.

Proposed §25.53(c)(4)(C) - Significant changes

Proposed subsection (c)(4)(C) requires an entity file an updated EOP if the entity makes a significant change to its EOP no later than 30 days after the change takes effect. A significant change to an EOP includes a change that has a material impact on how the entity would respond to an emergency.

Oncor, CenterPoint, and SPS recommended modifications of proposed subsection (c)(4)(C). Oncor recommended modifying the rule so entities have the option to file "a comprehensive detailed summary of its updated EOP and make a complete unredacted copy of the updated EOP available to the commission for inspection" instead of filing a complete EOP. CenterPoint recommended that the confidentiality language it recommended apply to subsection (c)(1) also apply to updated filings.

SPS opposed the requirement under proposed subsection (c)(4)(C) to refile an EOP when significant changes are made to the plan. SPS supported the commission's goal to increase transparency, however expressed concern that the requirement to file, or refile, updated plans when significant changes are made would be needlessly burdensome to entities as well as the commission and would increase the risk of exposure of confidential information. Further, SPS commented that this requirement would "distract from the core objectives of this process to address significant, material threats to service reliability." SPS commented that the requirement to re-file EOPs with all its required annexes to be an "unduly onerous requirement" for a change to one portion of the EOP. Instead, SPS recommended requiring entities to file a comprehensive summary of their EOP in an initial filing 90 days after rule publication and an update to the summary within 30 days of a significant change to the EOP. Further, SPS also recommended requiring an executive outline detailing the changes to the EOP with the EOP summary.

Commission Response

The commission agrees with SPS that this requirement is burdensome and removes the requirement accordingly.

LCRA asked the commission to clarify whether a change in the list of employees is considered a "significant change," as there could be "employee turnover, job changes, (or) title changes... (that) could make this requirement extremely burdensome."

Consistent with its recommendations for proposed subsection (c), SPS recommended adding the word "summary" after each occurrence of the term "EOP." Similarly, TNMP suggested modifying proposed subsection (c)(4)(C) to provide for the filing of a comprehensive EOP summary.

Commission Response

The concerns of LCRA, SPS, and TNMP are moot as this requirement has been removed from the rule.

Proposed §25.53(c)(4)(D) - Updated EOP filings with ERCOT

Proposed subsection (c)(4)(D) requires an entity with operations within the ERCOT power region to submit its updated EOP under proposed subsection (c)(4)(A), (c)(4)(B), and (c)(4)(C) to ERCOT within 30 days of filing the updated EOP with the commission.

TNMP opposed proposed subsection (c)(4)(D) and recommended its deletion because Nodal Operating Guide 3.7(6) requires entities to provide the same information to ERCOT. LCRA suggested deletion of proposed subsection (c)(4)(D) as LCRA believes current ERCOT Protocols "should continue to govern submissions of EOPs to ERCOT." Currently, as LCRA pointed out, the ERCOT Nodal Operating Guide requires Transmission Operators to submit EOPs to ERCOT, as required by NERC, since ERCOT is considered the Balancing Authority and Reliability Coordinator for the ERCOT region. LCRA requested clarification as to why ERCOT would need to review other types of entities' EOPs.

Commission Response

The commission disagrees with LCRA's and TNMP's assessment that ERCOT Nodal Operating Guide §3.7(6) satisfies the requirements of Tex. Util. Code §186.007 and declines to make the requested change to the rule. Nodal Operating Guide §3.7(6) only applies to Transmission Operators operating in the ERCOT power region. Tex. Util. Code §186.007 and this rule apply to entities other than Transmission Operators operating in the ERCOT power region.

Commission Response

Tex. Util. Code §186.007(f) requires an entity within the ERCOT power region to provide its EOP to ERCOT in its entirety. As such, the commission disagrees with LCRA's assessment and declines to change the rule.

CenterPoint recommended updated EOP filings required under proposed (c)(4)(D) be subject to Protected Information requirements.

Commission Response

The commission agrees that any submission to ERCOT of an updated EOP is subject to protected information requirements. The requirement to submit to ERCOT unredacted plans is codified in adopted (c)(3)(A)(iii). The requirement that updated EOPs are subject to Protected Information requirements is codified as adopted (c)(3)(D).

Proposed §25.53(c)(5) - ERCOT EOP

Proposed subsection (c)(5) requires ERCOT to maintain a current EOP in its entirety, consistent with the requirements of proposed subsection (c) and available for review by the commission or the commission's designee, notwithstanding the other requirements of proposed subsection (c).

TNMP requested deletion of proposed subsection (c)(5) as it is redundant. Specifically, TNMP indicated that Nodal Operating Guide 3.7(6) already requires similar information to be provided to ERCOT.

Commission Response

Adopted subsection (c)(5) is intended to require ERCOT to develop and maintain its own EOP consistent with the requirements of this rule. The commission amends the rule for clarity consistent with Oncor's recommendation discussed below under this heading.

TPPA recommended that proposed subsection (c)(5) be amended to require ERCOT to securely provide its unredacted EOP filed with the commission to market participants because ERCOT has access to the unredacted EOPs of market participants under proposed subsection (c)(4)(D). TPPA also suggested that a redacted version of ERCOT's EOP be published on its Market Information System or filed with the commission for public inspection.

Commission Response

The commission declines to change the rule according to TPPA's recommendations. Simply because an entity submitted its EOP to ERCOT does not entitle that entity or make it useful for that entity to receive a copy of ERCOT's EOP. ERCOT's procedures governing its interactions with market participants are enumerated in great length through the Nodal Protocols and the various Market Guides. All market participants have access to these documents and are bound by agreement with ERCOT to be familiar with the contents thereof.

Oncor recommended replacing "a current EOP" with "its own current EOP" in proposed subsection (c)(5) to more clearly indicate that ERCOT must create and maintain an EOP for itself.

Commission Response

The commission agrees with Oncor's recommendation and amends the rule accordingly.

Proposed §25.53(d) - Required EOP Information

Proposed subsection (d) requires an entity to include in its EOP common operational functions for all emergencies and annexes specific to certain types of emergencies listed under subsection (e). An entity that claims a provision of subsection (d) does not apply to it must include in its EOP filing to the commission the reasons for which the specific provision does not apply.

EPE, TCPA, ARM, LCRA, Oncor, and GVEC opposed the requirement of proposed subsection (d) to require an entity to consolidate its EOP in a single document. Consistent with its recommendations for proposed subsections (e) and (f), EPEC recommended the commission not require a consolidated EOP under proposed subsection (d) and instead permit a summary to be filed for the EOP and any required annexes.

Commission Response

As noted previously, the rule does not require an entity to adhere to a specific format for its EOP. The entire set of plans designed to prepare for an entity's response to an emergency must be filed with the commission with the confidential portions removed. An executive summary of the plan is also required. As such, the commission declines to change the rule based on the recommendations of EPE, TCPA, ARM, LCRA, Oncor, and GVEC. An entity is required to file a document which contains the minimum required information in whatever format best suits the entity.

Consistent with its recommendations for the definition of "emergency" under proposed subsection (b)(3), TCPA further recommended that an EOP's scope be limited to "reasonably foreseeable" emergencies under proposed subsection (d). ARM also recommended changing the language "every type of emergency" in proposed subsection (d) to "every reasonably foreseeable type of emergency" while Enbridge suggested the same language be replaced with "most common emergencies," so as to differentiate between "emergency preparedness and the specific annexes." Oncor and TNMP stated the phrase "common operational functions that can be used for every type of emergency" does not appear in the existing version of §25.53 and is thus unclear in how it is used in proposed subsection (d). Oncor and TNMP emphasized that in order for an EOP to be effective, it must be designed to address "system emergencies" as defined in §25.5(128), not "every type of emergency" which may involve only "common operational functions" and not activation of the EOP.

Commission Response

The rule is designed to ensure that entities have considered and adequately prepared for emergency response. This preparation necessarily requires the development of operational functions that come into play regardless of emergency type and of procedures that are specific to particular types of emergencies. The commission clarifies the language of (d) accordingly.

The commission declines to adopt the other recommendations made by commenters, as this clarification should substantively address the underlying concerns. Furthermore, the commission's changes to the definition of "emergency" under adopted subsection (b)(3) partially address TCPA, ARM, and Enbridge's recommendations. In response to Oncor and TNMP's comments, the commission acknowledges the difference between "system emergency" as defined under §25.5(128) and the adopted rule's definition of "emergency" under subsection (b)(3). However, the adopted rule extends the definition of emergency to include hazards and threats. Oncor and TNMP's concerns are also addressed under heading (b)(3) defining "emergency" and the commission's revision of the same.

AEP requested the commission clarify the word "outline" in subsection (d) due to the ambiguity in what is meant for an entity to "outline" its responses to the types of emergencies the annexes are required to address under proposed subsection (e). Specifically, AEP noted that proposed subsection (c)(1)(A) requires a utility to file an "unredacted EOP in its entirety" and requested the commission determine whether the term "outline" is consistent with or differs from that requirement.

Commission Response

The commission has amended subsection (c)(1)(A) to permit a summary of the EOP and a complete revised copy of the plan with the confidential portions removed to be filed with the commission in lieu of a full, unredacted version. This revision addresses AEP's request for clarification of the same in relation to what is meant by the term "outline" in subsection (d). The commission declines to define the term "outline" as entities are best situated to determine the practices and procedures relevant to its industry, locale, and customers when returning to normal operations after disruptions caused by an incident. The intent of the rule is not to prescribe to each entity the manner in which it responds to an emergency but ensure that entities have considered and adequately prepared for emergency response via implementation of standard minimum plan content.

LCRA urged the commission to avoid overly prescribing EOP informational requirements in proposed subsection (d). Specifically, LCRA expressed concern that the proposed subsection may undermine the efficiency and effectiveness of an "integrated, enterprise-wide" approach to address emergency planning needs unique to the utility implanting the EOP.

Commission Response

The commission disagrees with LCRA's comments on subsection (d). The commission agrees that efficiency and effectiveness are important, however, emergency preparedness is equally important. The commission believes that the current language strikes a balance.

TPPA recommended that the requirements of subsection (d)(1), (d)(2), and (d)(4) regarding an approval and implementation section, record of distribution, and affidavit requirement, respectively, be a reporting requirement separate from the EOP itself. Otherwise, a cyclical timing issue in finalizing and distributing the EOP will result. GVEC made the same recommendation as TPPA in more general terms and also referenced the annexes required under subsection (e). GVEC elaborated that these additional requirements are not essential to a functioning EOP.

Commission Response

The commission agrees with TPPA and GVEC that the record of distribution required under proposed subsection (d)(2), list of emergency contacts under proposed subsection (d)(3), and affidavit required under proposed subsection (d)(4) should be filed separately from the EOP. Furthermore, the commission moves the requirements of (d)(2), (d)(3), and (d)(4) into adopted subsection (c)(4) as adopted subsection (c)(4)(A), (c)(4)(B), and (c)(4)(C), respectively, and amends the requirements to permit these documents to be filed separate from the EOP. The commission declines to adopt TPPA and GVEC's recommendation that the approval and implementation section under (d)(1) should be filed separately from the EOP as it contains information necessary for an entity's emergency planning such as the EOP's scope and applicability. The commission substantively addresses its rationale for the inclusion of adopted subsection (d)(1) under headings (d)(1)(B), (d)(1)(C), and (d)(1)(D).

CenterPoint asserted the best practice for updated EOPs would be to track each iteration of the document through version number or a similar system, such as a control number, rather than providing updated versions as considered in the proposed rule.

Commission Response

The commission agrees with CenterPoint that tracking EOP updates with a version number or some other system is more efficient than requiring the submission of each individual updated draft. The adopted rule does not require the submission of an updated draft after each significant change made to an entity's EOP.

Proposed §25.53(d)(1)(B) - Responsible Individuals

Proposed subsection (d)(1)(B) requires an approval and implementation section included in the EOP to list individuals responsible for maintaining, implementing, and revising the EOP.

SPS opposed the requirement of proposed subsection (d)(1)(B) and recommended it be deleted from the proposed rule. SPS stated the provision would be unduly burdensome to apply in practice due to employee turnover necessitating frequent changes to the EOP. ARM alternatively recommended that proposed subsection (d)(1)(B) permit identification of groups or teams responsible for EOP implementation activities which would alleviate the administrative burden of implementing the proposed subparagraph. TCPA argued that proposed subsection (d)(1)(B) is improper in specifying individuals to be identified in maintenance, implementation, and editing the EOP when instead specifying groups, teams, or other sustainable reference will reduce unnecessary and wasteful efforts in keeping the EOP updated.

Commission Response

The commission declines to modify the rule based on the comments filed on this subparagraph. The identification of specific individuals who are accountable for modifying and implementing EOPs is important to assess the emergency preparedness of an entity. However, the commission agrees with commenters that the identification of individuals by name would be burdensome. The commission clarifies that an entity can comply with (d)(1)(B) by listing the titles or specific designations of individuals responsible for maintaining and implementing the EOP and those who can change the EOP, so long as the title or designation is specific enough to identify the specific holder of that title or designation at any time. The commission agrees that efficiency and effectiveness are important, however, emergency preparedness is equally important. The commission believes that the current language strikes a balance.

TLSC requested proposed subsection (d)(1)(B) be amended to specifically identify employees responsible for emergency planning concerning customers medically dependent on electricity.

Commission Response

The commission declines to modify the rule to require entities to specifically identify employees responsible for emergency planning concerning customers medically dependent upon electricity. The rule requires the identification of all individuals responsible for maintaining and implementing an entity's EOP. To the extent that this includes emergency planning for customers medically dependent on electricity these individuals must also be identified.

Proposed §25.53(d)(1)(C) - Revision control summary

Proposed subsection (d)(1)(C) requires an approval and implementation section included in the EOP to maintain a revision control summary that outlines changes made to an EOP and records the dates that changes are made.

ARM and TCPA opposed the inclusion of proposed subsection (d)(1)(C) because it is "unduly burdensome" and recommended it be deleted from the proposed rule. TCPA alternatively recommended revising proposed subsection (d)(1)(C) to require tracking only of "material" changes to the EOP.

Commission Response

The commission disagrees with ARM and TCPA that the requirement of proposed subsection (d)(1)(C) to provide a revision control summary is "unduly burdensome." The commission agrees with TCPA that "material" changes should be tracked in a revision control summary but declines to adopt language only requiring the tracking of "material" changes. It is conceivable that there are organizational, clerical, or formatting changes to an EOP that may later be revealed to be material in drills or implementation of the EOP. Furthermore, dates of revision and the substance of EOP changes are known to the entity and needed by the commission to ensure revision integrity.

CenterPoint recommended revising subsection (d)(1)(C) to only track changes to EOPs that are changed from the initial EOP filing required by proposed subsection (c)(1).

Commission Response

The commission agrees with CenterPoint's recommendation and amends subsection (d)(1)(C) accordingly.

Proposed §25.53(d)(1)(D) - EOP date of adoption

Proposed subsection (d)(1)(D) requires an approval and implementation section included in the EOP to contain a dated statement indicating when the current EOP was adopted by the entity.

ARM recommended proposed subsection (d)(1)(D) be deleted as it is unnecessary because, in ARM's view, any newly issued EOP clearly supersedes a previous EOP. ARM asserted that since proposed subsection (d)(1)(E) already requires a dated statement of adoption indicating the EOP on file is the most recent and adopted EOP, subsection (d)(1)(E) should suffice for tracking changes to an EOP by the commission. CenterPoint provided draft language for proposed subsection (d)(1)(D) which consists of striking the word "dated" from the provision.

Commission Response

The commission disagrees with ARM and CenterPoint that the requirement of proposed subsection (d)(1)(D) to provide a dated statement that the current EOP supersedes previous EOPs is "unnecessary." In the interest of clarity, each EOP summary, full version with confidential portions removed, or unredacted full version must contain a dated statement that the current EOP supersedes previous EOPs.

Proposed §25.53(d)(1)(E) - Date of Approval

Proposed subsection (d)(1)(E) requires an approval and implementation section included in the EOP to provide the date the EOP was most recently approved by the entity.

CenterPoint recommended a clerical change adding the word "states" to the beginning of proposed subsection (d)(1)(E).

Commission Response

The commission agrees with CenterPoint's recommended change for subsection (d)(1)(D) and implements its recommended language.

Proposed §25.53(d)(2), §25.53(d)(2)(A), and §25.53(d)(2)(B) - Record of Distribution

Proposed subsection (d)(2) requires an EOP to include a record of distribution that, under proposed subsection (d)(2)(A) and (d)(2)(B), must include names and titles of persons in the entity's organization receiving the EOP, and a record of dates when the EOP is issued to the listed persons.

ARM, AEP, LCRA, and TEC opposed the requirements of subsection (d)(2), as proposed, as administratively burdensome due to employee turnover and volume concerns.

LCRA requested the commission revise proposed subsection (d)(2) to permit an entity to "provide a record of employees with access to the EOP and the corresponding date when access was granted" provided the entity stores its EOP securely. AEP similarly recommended the list requirement be replaced with a description affirming the existence of distribution procedures to ensure relevant employees receive the EOP. LCRA emphasized that the provision "should not be interpreted to require 'distribution' by email or other similar means, if that is not how the entity maintains and controls access to its EOP." LCRA also recommended the commission address whether updating the list of employees with access to the EOP in accordance with proposed subsection (d)(2) constitutes a "significant change" requiring re-filing of the EOP with the commission under proposed subsection (c)(4)(C). LCRA commented that an update to the employee list should not be considered a "significant change" under proposed subsection (c)(4)(C), citing similar administrative burden concerns as SPS and ARM in their comments under subsection (d)(1)(B) regarding employee turnover.

Commission Response

The commission declines to change the rule to permit an entity to only provide a description of its distribution process, as recommended by AEP. The commission finds identification of specific individuals relevant to its analysis of the overall state of the industry's preparedness by demonstrating each entity's broad and relevant awareness of EOP procedures and accountability to those procedures. The high turnover rates cited by commenters only increases the value of the commission knowing that an entity is tracking who has access to the EOP and when.

In response to LCRA's comments, the commission declines to clarify what qualifies as "distribution" for the purposes of this paragraph. The entity should choose the most appropriate and efficient administrative process that ensures its relevant employees have access to its EOP and document the process accordingly.

As discussed under heading (c)(4), the commission has moved the record of distribution requirement of proposed subsection (d)(2) into adopted subsection (c)(4) for annual filings separate from an EOP, specifically as in adopted subsection (c)(4)(A). Therefore, LCRA's request for clarification does not need to be addressed further.

ARM, Enbridge, and SPS recommended proposed subsection (d)(2) be deleted. AEP also expressed concerns over preserving employee confidentiality for the proposed list. CenterPoint and Enbridge emphasized that each entity is unique in its business structure and operational models and that what should be considered important is that "the entity can confirm applicable personnel within its unique model have been trained."

CenterPoint provided draft language for proposed subsection (d)(2)(A) which would require entities to report persons who have access to the EOP or include a statement that the EOP was distributed, or made accessible, to all persons in the entity's organization. CenterPoint also recommended language for subsection (d)(2)(B) which amended the subparagraph to include dates of distribution or accessibility to the EOP.

ARM and AEP commented that the affidavit under subsection (d)(4) satisfies the intended purpose of subsection (d)(2), as subsection (d)(4) requires a generalized affirmation from the entity's highest-ranking representative that relevant employees have been trained in accordance with and reviewed the entity's EOP. As an alternative, if the commission declines to delete proposed subsection (d)(2), ARM recommended proposed subsection (d)(2) be amended to be less prescriptive. ARM specifically requested that the commission "at a minimum delete the requirement to list individuals receiving the EOP" as it would unnecessarily increase the volume, complexity, and cost of compliance in developing and implementing an EOP and that a table may not be an ideal format due to the same.

TEC recommended that the list required under proposed subsection (d)(2) be limited to only management personnel who receive the EOP. TEC explained that this change would effectuate the same purpose of ensuring the EOP is distributed to the relevant individuals while making reporting the EOP to the commission easier to manage for entities.

Commission Response

The commission disagrees with ARM, Enbridge, AEP, TEC, SPS, and CenterPoint, as the list of personnel contemplated under subsection (d)(2) is necessary for the commission to audit whether personnel responsible for certain EOP procedures have in fact received the required training relevant to such responsibilities. An entity that decides to limit the list of responsible people must nonetheless provide the list to the commission and ERCOT. However, to make compliance with this requirement less onerous for entities and better align the rule with its intended purposes, the commission modifies the rule to require the titles and names of persons in the entity's organization that have been provided and trained on the EOP. The commission further modifies the rule to require dates of distribution or accessibility, and training, as appropriate. An entity should interpret this requirement in a manner that best aligns with its EOP training and distribution practices, and provides the commission with a comprehensive and detailed accounting of the distribution of its EOP to relevant personnel.

Proposed §25.53(d)(3)

Proposed subsection (d)(3) requires an EOP to include a list of emergency contacts for the entity, including identification of single points of contact during an emergency.

LCRA asserted that the term "emergency contacts" and the request for "single points of contact during an emergency" in proposed subsection (d)(3) is unclear due to the plural and singular usages of the term "contact." LCRA further expressed that it is also unclear whether the emergency contacts should be inclusive or separate from the single points of contact. Accordingly, LCRA requested that the commission revise proposed subsection (d)(3) to be unambiguous and clarify the intention of requesting such information. LCRA requested clarification on whether submission to the commission for a representative, whose information is already on file with the commission, is different than the requested emergency contact in the proposed paragraph.

CenterPoint requested subsection (d)(3) be deleted from the proposed rule and recommended the provision regarding submission of emergency contact information be moved to proposed subsection (g). Specifically, CenterPoint argued that including a list of emergency contacts in an EOP has no clear benefit for the reasons discussed in subsection (d)(2) such as personnel turnover and business structure.

Commission Response

The intent of proposed subsection (d)(3), adopted as subsection (c)(4)(B), is to ensure each entity to which this rule applies provides and maintains an accurate list of representatives the commission can contact during an emergency. The commission requires a list of emergency contacts, which includes specifically identified individuals who can immediately address urgent requests and questions from the commission during an emergency. Whether the entity identifies one or more individuals to serve this function is left to the entity to decide; however, the commission recommends an entity have at least one primary and one back-up contact identified. The commission modifies the rule accordingly.

The commission declines to allow an entity to rely solely on the contact information on file with the commission in its Market Directories because there has been a consistent pattern of entities failing to keep contact information current without a required annual update. Therefore, the adopted rule requires an updated emergency contact list with an entity's initial filing and with each annual update, as a supplement to the contact information contained in the commission's Market Directories. The commission clarifies that for purposes of this requirement an entity must include all emergency contacts that are relevant to the entity's EOP planning including representatives, if applicable. If an entity has multiple emergency contacts the entity should highlight and place at the top of the list, the entity's main emergency contact.

The commission agrees with CenterPoint that the emergency contact list should not be included in an entity's EOP and relocates the requirement to subsection (c)(4)(B), which contains documents that must be filed with an entity's EOP.

Entergy and SPS expressed concern that if the emergency contact information is available publicly, citizens may contact specific individuals while the emergency contact is working to address the emergency and that it risks listed emergency contacts becoming a potential target of a cyberattack. Entergy supported the intention of the proposed rule but requested that it be revised to provide the required emergency contact information in a redacted form for public filing and the unredacted form provided confidentially.

Commission Response

The commission agrees with Entergy and SPS that the list of emergency contacts can be filed confidentially.

TLSC proposed that subsection (d)(3) include a general hotline activated during disaster or emergency situations, providing a single point of contact during emergencies for individuals who are medically dependent on electricity.

Commission Response

The commission declines to adopt TLSC's recommendation to amend proposed subsection (d)(3) to require all entities to implement a general hotline activated during an emergency, because it is beyond the scope of this rulemaking to impose such a specific requirement. However, adopted subsection (d)(2) does lay out requirements that entities include a communications plan, which for most entities includes a plan for communicating with the public during an emergency. Nothing in the rule precludes an entity from voluntarily implementing a hotline to be activated during an emergency.

Proposed §25.53(d)(4) - Affidavit

Proposed subsection (d)(4) requires an EOP to include an affidavit from the entity's highest-ranking representative, official, or officer with binding authority over the entity to affirm a number of features of the EOP which are discussed in greater detail under the subparagraphs below.

CenterPoint, TCPA, and ARM opposed the inclusion of subsection (d)(4) in the proposed rule. Consistent with its recommendations for subsection (c)(2) and subsection (c)(2)(B), CenterPoint asserted that the affidavit required by proposed subsection (d)(4) should not be included in the EOP but instead be an annual filing separate from the EOP. For the same reason, CenterPoint recommended deleting proposed subsection (d)(4) in its entirety. ETEC claimed the affidavit required to be included in the EOP under proposed subsection (d)(4) is only required by the commission for verification or compliance purposes. ETEC elaborated that the affidavit is not a document that provides guidance or assistance during an emergency and therefore should not be included in the EOP. However, ETEC stated it is not opposed to submitting the same affidavit as detailed under subsection (d)(4) provided it is separate from being filed with the EOP.

Commission Response

The commission agrees with CenterPoint, TCPA, ARM, and ETEC that the affidavit requirement should be separate from the EOP. The commission's revision to proposed subsection (c)(1)(A) permits an entity to file with the commission a summary of the EOP, and the commission modifies the EOP to be included as a part of that summary. These changes substantively address CenterPoint, TCPA, ARM, and ETEC's concerns.

ARM and TCPA requested that proposed subsection (d)(4) retain the current rules requirement for an affidavit from an "owner, partner, officer, manager, or other official with responsibility for the entity's operations." ARM asserted the rule could create a compliance bottleneck that "might span multiple REP operations as well as generation operations for affiliated power generation companies that would all have to go through the same individual." ARM believed the entity should be given discretion to determine the person with the best knowledge of the entity's operations and, under proposed subsection (d)(4), would attest to those processes in the submitted affidavit included in the EOP. ARM referred to §25.71(d) (relating to General Procedures, Requirements and Penalties), §25.88(e)(2) (relating to Retail Market Performance Measure Reporting), and §25.91(d) (relating to Generating Capacity Reports), as containing language similar to its recommendations. Similarly, CenterPoint and TCPA requested an officer having binding authority over the entity should be able to make the affirmation under proposed subsection (d)(4), and not just the "highest-ranking" officer.

Commission Response

The commission disagrees with ARM, TCPA, and CenterPoint as the attestation required under the rule mirrors the attestation required under §25.55(c) and 25.55(f) for weather emergency preparedness reports. For consistency and to impress upon entities the necessity of emergency planning, the commission retains the requirement in the proposed rule for the attestation to be signed by the highest-ranking officer.

Proposed §25.53(d)(4)(A) - Relevant Operating Personnel

Proposed subsection (d)(4)(A) requires an affidavit to attest that the EOP has been reviewed and approved by appropriate executives.

Oncor recommended that proposed subsection (d)(4)(A) be amended to permit compartmentalization of training to personnel on portions of the EOP that are applicable to their work responsibilities and provided draft language consistent with this recommendation:

Commission Response

The commission agrees with Oncor's request to permit compartmentalization of training to personnel on portions of the EOP that are applicable to their work responsibilities and adopts Oncor's recommended language in adopted subsection (c)(4)(C)(i). The commission's intent for this provision is to require relevant personnel be trained on the specific portions of an entity's EOP and required annexes to the extent applicable to their work functions.

LCRA recommended that proposed subsection (d)(4)(A) be deleted from the rule due to the subjectivity involved. Specifically, LCRA stated "it is impossible to affirm via affidavit an employee's personal and individual commitment" that "cannot be objectively verified by an entity's highest-ranking official." LCRA recommended proposed subsection (d)(4)(A) be modified to delete the phrasing "and such personnel are committed to following the EOP except to the extent deviations are appropriate as a result of specific circumstances during the course of an emergency."

Commission Response

The commission modifies this provision to require the affidavit to include an attestation that relevant operating personnel are "instructed" to follow applicable portions of the EOP except to the extent deviations are appropriate as a result of specific circumstances during the course of an event.

Consistent with its recommendations for proposed subsection (d)(4), TCPA recommended the training requirement under proposed subsection (d)(4)(A) be more generalized.

Commission Response

The commission agrees with TCPA's recommendation and adopts its proposed language for relocated adopted subsection (c)(4)(C)(i).

Proposed §25.53(d)(4)(C) - Required Drills

Proposed subsection (d)(4)(C) requires an affidavit to attest that required drills have been conducted.

ETEC requested the commission clarify proposed subsection (d)(4)(C) which states "required drills have been conducted," in contrast to proposed subsection (f), which states that if the EOP was activated for an incident in the last 12 months, a drill is not required to be performed for that 12-month period. Accordingly, the two provisions could cause confusion, assuming that more than one drill is required per year.

Commission Response

The commission acknowledges the potential discrepancy identified by ETEC and adds a cross-reference to subsection (f) to adopted subsection (c)(4)(C)(iii).

Proposed §25.53(d)(4)(D) - Distribution to Local Jurisdictions

Proposed subsection (d)(4)(D) requires an affidavit to attest that the EOP or appropriate summary has been distributed to local jurisdictions as needed.

Sharyland, GVEC, and TEC opposed proposed subsection (d)(4)(D) unless the commission provided further clarification on the term "local jurisdictions." LCRA, TCPA, and CenterPoint recommended subsection (d)(4)(D) be deleted in its entirety. Sharyland requested clarification on the meaning of the term "local jurisdictions" as used in proposed subsection (d)(4)(D). Specifically, Sharyland requested the commission clarify the jurisdictions to which the utilities may be expected to distribute their EOPs or summaries. Similarly, GVEC and TEC argued that the term "local jurisdictions" in proposed subsection (d)(4)(D) is overly broad as it suggests "entities must have a plan for communicating with every conceivable local and state entity and official." GVEC argued that the term "local jurisdictions" is ambiguous and overly burdensome as entities are already required to have a public communications plan under proposed subsection (d)(5). GVEC recommended that the commission delete or narrow the scope of proposed subsection (d)(4)(D) in order to reduce the undue administrative burden and costs it would otherwise impose on entities as well as mitigate security risks involved with disclosure to local jurisdictions. TEC argued that the local jurisdiction distribution requirement under proposed subsection (d)(4)(D) undermines emergency operations at a time when resources may be strained. TEC recommended that the commission either "identify specific and limited governmental entities that should be included in a communication plan" or qualify proposed subsection (d)(4)(D) with "as appropriate in the circumstances for the entity."

CenterPoint asserted that "there is no legal mandate for entities to distribute their EOPs to local jurisdictions" and entities may not need or want to do so. CenterPoint further commented that the "as needed" qualification in the proposed subparagraph is ambiguous and should be clarified by the commission. Specifically, CenterPoint stated it is unclear what process would be used to determine the "need" of a local jurisdiction for an entity's EOP or who would be qualified to identify local jurisdictions that "need" the EOP using such a process.

Commission Response

The commission disagrees with Sharyland, GVEC, TEC, LCRA, TCPA, and CenterPoint and declines to delete the requirement for entities to coordinate with local jurisdictions in subsection (d)(4)(D). The rule does not require that an entity distribute its EOP to local jurisdictions. However, the entity must affirm that any local jurisdictions that need a copy of an entity's EOP have, in fact, received it. Emergency planning and an entity's obligations as a utility necessarily involve coordination with local jurisdictions served or impacted by the utility service the entity provides. As such, an entity must be aware of, and responsible for, identifying such local jurisdictions and distributing its EOP "as needed." The commission notes this requirement is adopted as subsection (c)(4)(C)(iv) in the final rule.

LCRA and TCPA argued that distribution of the EOP to "local jurisdictions" under proposed subsection (d)(4)(D) jeopardizes the sensitive nature of the information provided in the EOP. TCPA argued there were "few, if any, scenarios that would warrant distribution of an EOP or any of its component procedures to a local jurisdiction" due to confidentiality concerns. LCRA also commented that the term "local jurisdictions" was ambiguous as used in the proposed subparagraph.

Commission Response

LCRA and TCPA's confidentiality concerns are substantially addressed by the commission's amendment to proposed subsection (c)(1) permitting entities to submit an EOP summary and full, revised EOP with confidential portions removed to the commission and a full, unredacted EOP to ERCOT. Consistent with those changes and as discussed under heading (c)(1) the commission amends the proposed requirement to permit distribution of the EOP summary filed with the commission to local jurisdictions in lieu of a full, unredacted copy of an entity's EOP.

Proposed §25.53(d)(4)(E) - Business Continuity Plan

Proposed subsection (d)(4)(E) requires an affidavit to attest that the entity maintains a business continuity plan that addresses a return to normal operations after an emergency.

TPPA requested clarification on what is included in the "business continuity plan" cited under proposed subsection (d)(4)(E).

Commission Response

The commission declines to define the form and content of a business continuity plan required under adopted subsection (c)(4)(C)(v), as an entity is best situated to determine the practices and procedures relevant to its industry, locale, and customers when returning to normal operations after disruptions caused by an incident.

Proposed §25.53(d)(4)(F) - National Incident Management System Training

Proposed subsection (d)(4)(F) requires an affidavit to attest that the entity's emergency management personnel who interact with government officials at all levels have received specific Federal Emergency Management Agency (FEMA) and National Incident Management System (NIMS) training.

CenterPoint, TCPA, and ARM recommended that proposed subsection (d)(4)(F) be deleted. ARM recommended moving the requirement for an entity to list emergency management personnel who have received NIMS training into proposed subsection (d)(4)(A) if proposed subsection (d)(4)(F) is deleted. Alternatively, ARM recommended proposed subsection (d)(4)(F) require only one employee within an entity be required to have received the specified NIMS training. Consistent with its recommendations for proposed subsection (d)(4)(A), TCPA similarly recommended proposed subsection (d)(4)(F) be deleted and the training requirement be more generalized and moved to (d)(4)(A). ARM and TCPA argued that proposed subsection (d)(4)(A) is unnecessarily burdensome due to the time requirements to complete the training and that some or all of the listed training may not available. ARM and TCPA further stated that the training requirement of proposed subsection (d)(4)(F) may create a communications bottleneck during an emergency if entities are restricted to communicating through personnel with the required training. Specifically, TCPA commented that an entity may have multiple teams of personnel who act as points of contact for government officials and that the specific training included in the proposed subparagraph are impractically lengthy and may be unavailable.

Commission Response

The commission declines to delete the proposed requirement as CenterPoint, ARM, and TCPA recommend. The commission also disagrees with ARM and TCPA that requiring NIMS training for specific personnel is unnecessarily burdensome. NIMS is a widely adopted national emergency management program among governmental entities, and the proposed amendment appropriately limits the requirement to emergency management personnel who are designated to interact with local, state, and federal emergency officials during emergency events. This provision strikes an appropriate balance between ensuring emergency preparedness and over-prescribing requirements for the same. This requirement is adopted as subsection (c)(4)(C)(vi).

The commission declines to adopt ARM's recommendation to limit required NIMS training to only one employee within an entity. It is conceivable that an entity may be organizationally structured so that one employee is the only "emergency management personnel who are designated to interact with local, state, and federal emergency management officials during emergency events," however the intention of the rule is to ensure that all such personnel have received NIMS training to maximize emergency response. Artificially limiting the training requirement to a single employee at an entity is contrary to the intent of the rule.

The commission declines to make the training requirement more generalized and move it from proposed subsection (d)(4)(F) into proposed subsection (d)(4)(A) as TCPA recommends. The commission instead moves the requirements of subsection (d)(2), (d)(3), and (d)(4) to adopted subsection (c)(4) and changes the requirements to permit these documents to be filed separate from the EOP.

TPPA recommended that the NIMS training citations in proposed subsection (d)(4)(F) be updated to the title of the course instead of the specific course number, otherwise proposed subsection (d)(4)(F) risks quickly becoming outdated. Similarly, Sharyland recommended revising updating the training citations in proposed subsection (d)(4)(F).

Commission Response

The commission agrees with Sharyland's recommendation for subsection (d)(4)(F) and amends adopted subsection (c)(4)(C)(vi) accordingly. Specifically, the commission identifies that emergency management personnel should have received the latest NIMS training, specifically IS-100, ISs-200, IS-700, and IS-800.

TPPA further recommended that the commission clarify that non-emergency management personnel would not be covered by proposed subsection (d)(4)(F) and thus required to receive the specified NIMS training. Oncor interpreted the requirement of proposed subsection (d)(4)(F) as not to apply to "personnel designated to interact with ERCOT" as ERCOT is not a "political subdivision" and such personnel are required to take training programs from NERC, ERCOT, and Oncor itself. Therefore, Oncor argued that such personnel should be exempted from the requirements of the proposed subparagraph. Oncor provided draft language consistent with its recommendation by adding the sentence "the entity's personnel who are designated to interact with ERCOT during emergency events are not subject to the requirements of this paragraph."

Commission Response

An employee that qualifies as emergency management personnel designated to interact with government officials must receive NIMS training. The commission agrees with TPPA that this requirement does not apply to non-emergency personnel, such as Mayors as per TPPA's example, that may also interact with government officials. The commission disagrees with Oncor that subsection (d)(4)(F) should explicitly exempt "personnel designated to interact with ERCOT." An entity may require certain personnel to only interact with ERCOT and other personnel to only interact with local, state, and federal emergency management officials. An entity is free to adopt such an organizational structure provided it complies with the requirements of this rule.

Proposed §25.53(d)(5) - Communication Plan

As discussed under heading (c)(1), the commission proposed subsection (d)(5) is adopted as subsection (d)(2).

Proposed subsection (d)(5) requires entities with transmission or distribution service operations, entities with generation operations, Retail Electric Providers (REPs), and ERCOT to develop a communications plan as detailed in subsection (d)(5)(A) through (d)(5)(D), respectively.

OPUC requested each subparagraph under proposed subsection (d)(5) include OPUC as a party to receive communications from an entity during an emergency as OPUC serves as a public information platform during emergencies. OPUC stated that including it would assist in the commission's intended goal for the "widest possible dissemination" of information.

Commission Response

Adopted subsection (d)(2)(A) through (d)(2)(D) already include a requirement that entities describe the process for communicating with state government entities in their communication plans; however, the commission acknowledges OPUC's valuable role as an information platform during emergencies and agrees to require entities to specifically describe procedures for communicating with OPUC during emergencies.

Consistent with its general comments regarding notice of updates to an EOP or individual annexes, City of Houston requested that all entities, prior to changing or updating the communications plan under proposed subsection (d)(5), coordinate and collaborate with local municipalities and critical infrastructure owners on the communication plan.

Commission Response

The commission declines to adopt the City of Houston's recommendation for proposed subsection (d)(5) requiring an entity to coordinate with local governments and critical infrastructure owners for input or refinement of its communication plan prior to filing with the commission. As noted in the commission's response under the General Comments heading, communications between an entity and its stakeholders require different forms, formats, and timelines. To create a single requirement for all entities would unnecessarily hamper an entity from using the most effective method of communicating with its stakeholders. Proposed subsection (c)(1) of this section requires entities to file EOPs annually and proposed subsection (c)(4) requires an entity to file an updated EOP if commission staff determines that the entity's EOP on file does not contain sufficient information to determine whether the entity can provide adequate electric service through an emergency. The commission maintains that these requirements provide the appropriate standard to determine whether an entity can effectively communicate during an emergency. The commission encourages an entity to take other reasonable measures, including communicating with its stakeholders for input and refinement of its communication plan but does not require it.

TPPA contended that a communication plan should be focused on "specific methods and forms of emergency communications" rather than processes on filing complaints. Additionally, TPPA responded that all entities are entitled to retain flexibility in communications given the nature of emergency events. TPPA expressed that proposed subsection (d)(5) may violate an entity's First Amendment rights, as, in TPPA's view, "a state agency requiring revisions to a communications plan, on pain of penalties if the plan is deemed inadequate, presents very serious First Amendment concerns" and argued that the commission should not regulate an entities' communications with the public or media.

Commission Response

The commission declines to remove the provision in subsection (c)(4) that would allow commission staff to seek revisions to an entity's communication plan as proposed by TPPA. The commission disagrees with TPPA's contention that allowing commission staff to request an updated EOP poses a threat to an entity's First Amendment rights if the requirement is applied to its communication plan. Requiring providers of a critical service, such as electricity, to maintain a plan for communicating with the public during a potentially life-threatening emergency is not a violation of the First Amendment, nor is allowing a state agency that is charged with ensuring the reliability of that service to complete a review of the adequacy of that plan.

Ensuring members of the public have access to critical information regarding their electric service during an emergency - which often carries with it the additional hazards of dangerous weather conditions, supply shortages, and unavailability of other critical services such as water or gas - is a compelling government interest. Further, the requirements of this rule are narrowly tailored by only requiring activation of these plans during an emergency, which is defined, in part, as a situation in which "the known, potential consequences of a hazard or threat are sufficiently imminent and severe that an entity should take prompt action to prepare for and reduce the impact of harm that may result from the hazard or threat" and by only requiring that an entity update its plan if it does not contain sufficient information for the commission to assess its adequacy.

TEC recommended clarifying that communications procedures in proposed subparagraphs §25.53(d)(5)(A) and (C) are for communicating and handling customer complaints during an emergency. SPS, AEP, and TNMP recommended adding the phrase "during an emergency" to modify "procedures."

Commission Response

The commission agrees with TEC, SPS, AEP, and TNMP's comments relating to the need to clarify the term "during an emergency" in relation to the communications plan required under adopted subsection (d)(2). Specifically, the commission revises adopted subsection (d)(2)(A) and (d)(2)(C) as recommended by TEC to clarify that the procedures to include in an entity's communication plan are intended for communicating and handling customer complaints during an emergency. Further, the commission modifies adopted subsection (d)(2)(B) in accordance with the recommendations of TEC, SPS, and AEP by adding the phrase "during an emergency" to clarify that the procedures to include in an EOP communication plan are intended for communication during an emergency.

Consistent with its comments regarding proposed subsection (d)(4)(D) relating to the term "local jurisdictions," TEC commented that "local and state governmental entities, officials, and emergency operations centers" in proposed subsection (d)(5)(A), (d)(5)(B), and (d)(5)(D) is overbroad and may challenge emergency operations. TEC recommended the commission "identify specific and limited governmental entities" to include in the proposed subparagraphs relating to the communications plan or else qualify the phrase as it appears in each subparagraph with "as appropriate in the circumstances for the entity."

Commission Response

The commission modifies adopted subsection (d)(2)(A), and (d)(2)(B), as requested by TEC, to add the phrase "as appropriate in the circumstances for the entity" to qualify the requirement that an entity describe the procedures for communicating with local and state governmental entities, officials, and emergency operation centers. The commission declines to modify adopted subsection (d)(2)(D) as requested by TEC due to the widespread audience ERCOT must reach. It is the commission's intent that an entity's communication plan addresses how the entity will communicate with appropriate local and state governmental entities, officials, and emergency operation centers during an emergency.

Proposed §25.53(d)(5)(A) - Communications Plan (Transmission and Distribution)

ETEC commented that the term "Reliability Coordinator" as it appears in proposed subsection (d)(5)(A) and (d)(5)(B) is undefined and therefore unclear. ETEC requested the commission add, or incorporate by reference a definition for the term "Reliability Coordinator" for clarity.

Commission Response

The term reliability coordinator is an industry term that is not ambiguous in context. However, to provide additional clarity, the commission modifies subsection (d)(2)(A) to specify that an entity with transmission or distribution service operations must include in its communication plan procedures for communicating with the reliability coordinator "for its power region."

LCRA requested the commission clarify that the "procedures for handling complaints" under proposed subsection (d)(5)(A), "specifically refers to complaints from the utility's end-use retail customers." LCRA noted that without such language, an entity may receive unrelated complaints regarding utility rates, service boundary disputes, and others, which are not relevant to an entity's EOP. GVEC requested the commission amend proposed subsection (d)(5)(A) for general clarification regarding communications plans. Like LCRA, GVEC specifically requested language identifying the "type of complaint" referred to and recommended as an example "complaints related to the emergency event" as proposed language.

Commission Response

The commission acknowledges LCRA's request to revise proposed subsection (d)(2)(A) to qualify that the procedures for complaints during emergencies be limited to retail end-use customers. Likewise, the commission acknowledges GVEC's request to provide more detail and specificity concerning the communications plan and to specify that complaints should be related to the emergency event. The commission maintains that the response to the comments of TEC under heading (d)(5) revising adopted subsection (d)(2)(A), and (C) as recommended by TEC to clarify that the procedures to include in an EOP are for communicating and handling customer complaints during an emergency, substantially address the concerns of LCRA and GVEC.

Proposed §25.53(d)(5)(B) - Communications Plan (Generation)

TPPA recommended proposed subsection (d)(5)(B) be deleted as it would require a generation entity to disclose its communications with fuel suppliers, which TPPA asserts is competitively sensitive information.

TCPA commented that the communications plan for generation entities under proposed subsection (d)(5)(B) does not need to require communication with the various groups listed as a result of every emergency due to potential ERCOT directives such as an ERCOT Operating Condition Notice (OCN). TCPA elaborated that an OCN precedes declaration of an actual emergency and "do(es) not warrant a communication step." Requiring communications in similar events would be inefficient. ETEC commented that generation entities are neither open to the public nor do they typically communicate directly with the public, and instead are dispatched by the applicable reliability coordinator directly. As such, generation entities routinely ensure the applicable reliability coordinator and connected transmission and distribution providers receive updated communications. For these reasons, ETEC commented that the requirement of proposed subsection (d)(5)(B) is overly burdensome and requested that it be revised to "clarify and limit the outlets with whom entities with generation operations must communicate."

Communication Plan

The commission declines to adopt TPPA's proposal to delete proposed subsection (d)(5)(B). The commission notes that having a plan in place for engaging in communication between an entity with generation operations and its fuel suppliers is vitally important to ensure a sufficient supply of fuel during emergency conditions and therefore declines to remove the requirement from an entity's communication plan. However, the contents of the plan need not identify specific fuel suppliers.

In response to the comments of TCPA and ETEC, the commission refers to its response to TEC above. The commission modifies adopted subsection (d)(2)(B) to add the phrase "as appropriate in the circumstances for the entity" to qualify the requirement that an entity describe the procedures for communicating with local and state governmental entities, officials, and emergency operation centers. It is the commission's intent that an entity's communication plan addresses how the entity will communicate with appropriate local and state governmental entities, officials, and emergency operation centers during an emergency.

Proposed §25.53(d)(5)(C) - Communications Plan (REP)

Proposed §25.53(d)(5)(C) requires a REP to include as a part of its communication plan procedures for communicating with the public and handling complaints during an emergency.

ARM argued that complaint handling is an important REP function, but that "complaint handling would (not) be impacted by most emergencies" and the purpose of the requirements to address complaint handling during an emergency is unclear. ARM noted that §25.485 (relating to customer access and complaint handling) requires REPs to investigate and respond to complaints within 21 days as opposed to emergencies which are generally "acute events." ARM recommended deleting the provision.

Commission Response

The commission declines to remove the requirement that a REP's EOP describe procedures for handling complaints during an emergency as requested by ARM. ARM is correct that §25.485 gives a REP 21 days to respond to complaints, but it also requires that REPs provide reasonable access to service representatives and have a toll free line that affords customers a prompt answer during normal business hours. Depending on the severity of the emergency, customer complaints may rise dramatically during the emergency and there must be procedures in place for the REP to collect and respond to the increased number of complaints in a timely manner. A REP's communication plan should include the procedures that allow the REP to adapt to differing levels of complaints during an emergency. If, however, as ARM suggests, a REP believes that its standard complaint processing procedures can withstand the increased level of complaints associated with emergencies, it may submit its standard complaint handling procedures as its emergency procedure.

TLSC recommended that proposed subsection (d)(5)(C) specify procedures for communicating with customers medically dependent on electricity during an emergency.

Commission Response

The commission agrees with the concern raised by TLSC and acknowledges that medically dependent customers may need targeted communication during and prior to imminent emergencies to allow these customers to plan to evacuate or have a backup supply of electricity available. However, the commission declines to make the recommended change. Adopted subsection (d)(2)(A) and (d)(2)(C) require entities with transmission and distribution service operations and REPs respectively to describe the procedures for communicating with customers. This requirement encompasses all customers, including the segment of customers that are medically dependent on electricity.

Octopus supported the intent of proposed subsection (d)(5)(C) in ensuring REPs have procedures in place to communicate with customers during an emergency. However, to ensure a REP can effectively do so, Octopus recommended the commission add a requirement that a REP verify that it has a current phone number or email address for each of its customers in case emergency communications are necessary as well as specify the medium of such emergency communications.

Commission Response

The commission declines to make the changes to adopted subsection (d)(2)(C) as requested by Octopus. The commission already requires a REP's communication plan to address the procedures to communicate with customers during an emergency. Further, adopted subsection (c)(3)(A) requires an entity to file an updated EOP if the entity has made a significant change to its EOP. Otherwise, under adopted subsection (c)(3)(B), an entity may provide a summary of minor changes, an attestation that the changes are not significant, and the affidavit required under adopted subsection (c)(4)(C).

Proposed §25.53(d)(6) - Emergency Response Supplies

Proposed subsection (d)(6) requires an EOP to include a plan to maintain pre-identified supplies for emergency response.

TLSC requested inclusion of language in proposed subsection (d)(6) requiring an entity to "maintain pre-identified supplies for emergency response to customers medically dependent on electricity."

Commission Response

The commission declines to revise subsection (d)(6) as requested by TLSC. The intent of proposed subsection (d)(6), adopted as (d)(3), is to ensure that an entity responding to an emergency has sufficient supplies to support its response efforts in ensuring continuity of electric service. However, the commission does not specify which supplies are required to be pre-identified, so an entity may include a plan for maintaining pre-identified supplies for emergency response to customers medically dependent upon electricity, as appropriate or if required by another provision of law.

Proposed §25.53(d)(7) - Emergency Response Staffing

Proposed subsection (d)(7) requires an EOP to include a plan that addresses staffing during an emergency response.

Octopus recommended that emergency staffing plans required under proposed subsection (d)(7) require an entity to identify resources outside of the ERCOT service area, if any, as access to such resources could be crucial in their emergency response efforts.

Commission Response

The commission declines to revise proposed subsection (d)(7) as requested by Octopus. An entity's plan for staffing must necessarily consider mutual aid assistance or other forms of staffing if the entity's staff is insufficient to adequately respond to an emergency. This includes securing staff needed from areas unaffected by the emergency. The commission further notes that the scope of this rule is not limited to entities operating in the ERCOT power region but to all entities operating in the State of Texas, regardless of power region.

Proposed §25.53(e) and §25.53(e)(1) - Annexes Required in EOP

Proposed subsection (e) and proposed subsection (e)(1) list the annexes that must be included in the EOP for transmission and distribution facilities owned by an electric cooperative, an electric utility, a municipally owned utility, or a transmission and distribution utility.

ARM generally opposed the requirement to file separate annexes in subsection (e) as operationally unnecessary, administratively burdensome, and risking competitively sensitive information. ARM stated that while a REP should be prepared for different types of emergencies, separate annexes should only be required if a REP's existing EOP does not include procedures for the emergencies listed within (e). Similarly, consistent with ARM's comments for subsection (d), EPEC recommended not requiring the annexes be consolidated into the EOP as subsection (e) requires because it will be time-consuming to combine them and that annexes are distributed on an as-needed basis among business units or personnel within a utility. Additionally, in EPEC's view, a comprehensive summary should be sufficient for the needs of the commission and a combined EOP is not helpful for utilities when undertaking EOP procedures.

Commission Response

The commission disagrees with ARM's assessment of subsection (e) of the proposed rule as operationally unnecessary, administratively burdensome, and risking competitively sensitive information. The proposed rule does not require an entity to create a new or separate set of procedures for responding to different types of emergencies, unless an entity's existing EOP does not fulfill the rule's minimum requirements, nor does the rule mandate a particular format or organizational structure for the EOP. EOP summaries and confidentiality are substantively addressed by the commission under headings (c), (c)(1), and (c)(1)(A).

TLSC expressed concern that the proposed rule did not adequately address the needs of vulnerable members of the public, such as individuals with disabilities or those medically dependent on electricity. TLSC generally requested the commission clearly make the safety of critical care and chronic condition customers a priority in this rulemaking and emphasized that Texans who rely on DME may lack physical and financial resources to provide their own back-up power necessary for continued use of their essential equipment.

TLSC maintained that the critical load customer registry is crucial for emergency planning for power outages and could be used to be more inclusive of vulnerable individuals and emphasize public awareness during a load shed event. TLSC argued that local utility providers should use the critical load customer registry to identify vulnerable populations within their jurisdiction and incorporate the risks and needs of those individuals in EOPs. TLSC emphasized that "residential customers integrated into the community living in single family homes and apartments who are medically dependent on electricity should be treated separately from other critical load customers" such as hospitals or natural gas production facilities.

TLSC opposed commercial entities having priority over residential customers, particularly residential customers under critical care or suffering from chronic conditions. TLSC proposed that each annex listed under subsection (e) be required to include procedures detailing the exchange of protected customer information, identifying customers medically dependent on electricity, how power dependent needs will be identified and planned for, how wellness checks will be conducted, identifying supplies and equipment available for emergency response, and generally be inclusive of the needs of vulnerable populations.

Commission Response

The commission substantively addresses the comments, concerns, and recommendations from the January 11, 2022 public hearing that overlap with TLSC's proposals under the heading EOP Public Hearing.

Regarding TLSC's comments that are not substantively discussed under that heading or elsewhere in this preamble, the commission responds as follows. In response to TLSC's proposal for residential customers medically dependent on electricity to be treated separately from critical load customers, the critical load rule already accounts for such a distinction under §25.497(2) and (3).

The commission disagrees with TLSC that commercial entities have priority over residential customers under current commission rules. The commission, as required by statute, provides discretion to utilities in determining how to prioritize between different types of critical load during energy emergencies. Each type of critical load is deemed to be critical based on its importance to public welfare, and the commission has not categorically prioritized any one type of critical load over another. However, PURA §38.076 requires the commission to adopt rules to "allocate load shedding" and "categorize types of critical load." The commission will implement this statutory requirement in a future rulemaking project. The treatment of different types of critical loads is an ongoing area of focus of the commission but is beyond the scope of this rulemaking.

GVEC contended that some of the items required by subsections (d), such as affidavits, and (e), such as distribution logs, pre-event plans, and after-action reports, are substantially different from and additional to essential EOP information. GVEC proposed that such additional materials be separated into a different document in order to preserve the functionality of an EOP for its intended use.

Commission Response

The commission agrees with GVEC's recommendation as addressed in the commission's responses under heading (c). The commission has also substantively responded to GVEC's concerns in other headings. Specifically, under heading (c)(1), the commission moves the requirements of subsection (d)(2), (d)(3), and (d)(4) into subsection (c) and permits these documents to be filed separate from the EOP. Further, the commission removes the requirement for an entity to file an after-action report after each activation of its EOP by deleting proposed subsection (c)(1)(C). Additionally, under headings (e)(1)(A)(iii) and (e)(1)(B)(iii), and (e)(2)(A)(iv) and (e)(2)(B)(iii), the commission removes the requirements for pre- and post-event meetings and merges the hot and cold weather annex requirements into a single annex for both transmission and generation entities under proposed subsection (e)(1) and (e)(2), respectively. Lastly, as discussed under heading (c), (c)(1), and (c)(1)(A), the commission amends adopted subsection (c)(1)(A) by permitting a summary of the EOP and complete copy of the EOP with confidential portions removed to be filed with the commission in lieu of a full unredacted EOP.

Consistent with its comments for subsection (d), LCRA generally opposed rigid requirements for the contents of an EOP, specifically with regard to the annexes that must be included under (e), as organizational needs may vary by entity.

Commission Response

The commission disagrees with LCRA's assessment that the proposed rule's requirements for annexes under subsection (e) are rigid. The proposed rule does not require an entity to make changes to its existing EOP, unless the plan does not satisfy the rule's minimum requirements, nor does the rule prescribe a specific organization or format for an entity's EOP. Further, Tex. Util. Code §186.007 requires the commission to analyze EOPs to determine the ability of the electric utility industry to withstand extreme events. Subsection (e) details the annexes that at a minimum should be addressed in an entity's EOP, as those related hazards and threats have the potential to affect the continuity of electric service. The commission agrees that organizational needs vary by entity, as do potential hazards and threats. Therefore, the proposed rule allows an entity to include additional annexes, if necessary, or to provide an explanation of why any required provision in this section is inapplicable.

TPPA proposed the inclusion of a provision within subsection (e) permitting the submission of a single annex for vertically integrated utilities that operate transmission and distribution lines as well as generation resources, such as MOUs, provided the filing entity clearly indicates that the annex covers both. TPPA further opined that due to anticipated time constraints between the new rule and the proposed filing date of EOPs, proposed §25.53(e) should be significantly diminished in scope or removed as a requirement. TPPA emphasized that the rulemaking effort should focus on requiring EOPs so that the commission can submit its statutorily required weather emergency preparedness report to the Legislature required under Tex. Util. Code §186.007. TPPA insisted that many of the annexes listed under proposed 25.53(e) "do not relate to weather emergency or weatherization preparedness" and concluded that the primary EOP under proposed §25.53(d), in conjunction with §25.55, is sufficient in providing information from utilities.

Commission Response

The commission agrees with TPPA that a single annex with proper notation may be submitted for entities that operate both transmission and distribution lines and generation resources and modifies the rule accordingly.

The commission declines to adopt TPPA's recommendation to diminish the scope of or remove subsection (e). The commission disagrees that this rule should focus exclusively on weather emergency preparedness. While the report required under Tex. Util. Code §186.007 focuses on weather emergency preparedness, §186.007(a-1) - (4) directs the commission to make recommendations on improving emergency operations plans in order to ensure the continuity of electric service.

Oncor recommended adding subsection (e)(5) to include the requirement of PURA §39.918(g) that mandates a transmission and distribution utility to provide in its EOP "a detailed plan for the use of (facilities that provide temporary emergency electric energy)" as described under PURA §§39.918(b)(1) - (2) . Oncor provided draft language regarding the same.

Commission Response

The commission agrees with Oncor that the proposed rule should include language to reflect the requirement under PURA §39.918(g) for a transmission and distribution utility to include in its EOP a detailed plan for the use of facilities that provide temporary emergency electric energy. The commission adopts subsection (e)(1)(H) accordingly.

Proposed §25.53(e)(1)(A) and (e)(1)(B) - Cold Weather and Hot Weather Emergency Annexes (Transmission and Distribution)

Proposed subsection (e)(1)(A) and (e)(1)(B) list the requirements for cold weather and hot weather emergency annexes, respectively, that must be included within an EOP for transmission and distribution facilities owned by an electric cooperative, an electric utility, or a municipally owned utility.

ETEC opposed the inclusion of a mitigation plan under (e)(1)(A)(i), (e)(1)(B)(i), (e)(2)(A)(i), and (e)(2)(B)(i) as inconsistent with subsection (d)'s requirement that "an entity's EOP ... outline the entity's response to the types of emergencies specified." ETEC recommended that the requirement under (e)(1)(A)(i) and (e)(1)(B)(i) for an EOP to include a mitigation plan be removed, because mitigation considerations occur prior to the scope of an emergency response plan. ETEC also argued that federal agencies such as FEMA require mitigation plans to be separate from the EOP and used as reference. Alternatively, ETEC recommends modifying the language for the proposed clauses (e)(1)(A)(i) and (e)(1)(B)(i) to specify that operational plans are intended to restore power caused by a cold or hot weather emergency.

If the commission rejects ETEC's alternative recommendation regarding proposed (e)(1)(A)(i) and (e)(1)(B)(i), ETEC further recommended specifically excluding non-TSPs from meeting the requirements of §25.55 through the addition of "if applicable" to the proposed rule clauses to remove any ambiguity.

Consistent with its comments for proposed subsection (e)(1)(A)(ii) and proposed subsection (e)(1)(B), Oncor recommended that the separate cold weather and hot weather annexes under proposed subsection (e)(1)(A) and (e)(1)(B) be combined into a single "Emergency Restoration" annex as such operational plans are essentially the same. Oncor provided draft language consistent with its recommendation.

Commission Response

The commission agrees with ETEC that mitigation plans should remain separate from an entity's EOP. The commission also agrees with Oncor's recommendation to combine the required cold weather and hot weather annexes into a single requirement. Subsection (e)(1) is revised accordingly.

Proposed §25.53(e)(1)(A)(i) and (e)(1)(B)(i) - Separate and Distinct Operational Plans

Proposed clauses (e)(1)(A)(i) and (e)(1)(B)(i) require cold weather and hot weather annexes to contain operational plans that are separate and distinct from the operational plans developed under §25.55(relating to Weather Emergency Preparedness).

LCRA, TPPA, Sharyland, and TEC commented on the ambiguity of the term "separate and distinct" in proposed clauses (e)(1)(A)(i) and (e)(1(B)(i) as the term relates to weather emergency preparedness plans required under §25.55.

LCRA and TPPA requested the commission clarify the term "separate and distinct," as it relates to §25.55 as it appears in proposed clauses (e)(1)(A)(i) and (e)(1)(B)(i) regarding cold and hot weather annexes, respectively. LCRA argued the term is unclear as to whether it is administrative or substantive in nature. LCRA contended that, if interpreted as a procedural requirement administratively, a §25.55 plan may not be used to satisfy proposed §25.53, alternatively, if interpreted as a substantive requirement, a utility may either not reference or must be entirely dissimilar to plans created under §25.55. LCRA proposed draft language for the rule merging the cold and hot weather annex and deleting the requirement that such an annex be "separate and distinct" from the report required under §25.55.

TPPA requested the commission elaborate on "whether the reference to 'separate and distinct' is meant to mean separate and distinct operational plans or separate and distinct weather emergencies." TPPA maintained that if separate and distinct operational plans is the intended meaning, that would require utilities to prepare two different response procedures which is detrimental to emergency response. If separate and distinct weather emergencies is the intended meaning, TPPA argued it is therefore not clear "what kinds of cold weather emergencies entities should plan for, but not weatherize for." Sharyland recommended that "separate and distinct" be deleted from clauses (e)(1)(A)(i) and (e)(1)(B)(i).

Sharyland, like LCRA, requested the commission make clear whether the operational plans developed under proposed §25.53 must be "separate and distinct" from operational plans developed under §25.55 or future rules relating to §25.55. In Sharyland's view, operational plans developed under §25.55 and future rules relating to it should be a "major component of hot and cold weather emergency preparedness standards" under (e)(1)(A) and (e)(1)(B), respectively. Therefore, absent any difference, the phrase "separate and distinct" should be deleted from the proposed clauses. Alternatively, if the commission does not adopt Sharyland's recommendation to delete "separate and distinct" from clauses (e)(1)(A)(i) and (e)(1)(B)(i), Sharyland requests clarification as to why the weather emergency preparedness provisions of §25.55 should not be part of the hot and cold weather annexes of the EOP. TEC recommended that "separate and distinct" be deleted from clauses (e)(1)(A)(i) and (e)(1)(B)(i) as the term is unclear what operational plans intended to mitigate the hazards of cold weather would be separate and distinct from those required under section §25.55. Additionally, TEC argued that the removal of the language would provide utilities with the flexibility to include operational plans that are appropriate for its EOP.

Commission Response

The commission acknowledges LCRA, TPPA, Sharyland, and TEC's concerns regarding the ambiguity of the requirement under subsection (e)(1) that the hot and cold weather annexes be "separate and distinct from the weather preparation standards required under §25.55." The commission revises the rule to clarify that all entities are required to address weather emergencies in their EOPs in a manner that is not simply duplicative of the weather preparedness standards prescribed under §25.55. Specifically, the commission clarifies the intent of §25.53 is for an entity to adequately plan its actions immediately prior to and during an emergency. In contrast, §25.55 is intended to ensure long-term mitigation planning for entities to, among other things, weatherize facilities and assets during blue sky conditions. Therefore, a hot and cold weather annex submitted under §25.53 may necessarily include information from the required reports under §25.55, but unless the §25.55 report adequately addresses the immediacy requirement implicit in §25.53, it is insufficient for purposes of a hot and cold weather annex.

Proposed §25.53(e)(1)(A)(iii) and (e)(1)(B)(iii) - Pre- and Post- Weather Emergency Meetings (Transmission and Distribution)

Proposed clauses (e)(1)(A)(iii) and (e)(1)(B)(iii) both require pre- and post-weather emergency meetings for transmission and distribution facilities to review lessons learned from cold weather and hot weather emergency incidents and to ensure necessary supplies and personnel are available through the weather emergency.

Sharyland, ETEC, TPPA, and TEC generally opposed, in whole or in part, the requirements of proposed clauses (e)(1)(A)(iii) and (e)(1)(B)(iii) for entities to hold pre- and post- cold or hot weather emergency meetings. Sharyland recommended proposed clauses (e)(1)(A)(iii) and (e)(1)(B)(iii) be revised with a condition that the meetings required under each clause be limited to when a significant interruption to electric service is expected or has already occurred. Sharyland elaborated, stating that there may be weather emergencies that either are not expected to or do not cause significant interruptions to the continuity of electric service and that requiring a meeting in such situations would be neither necessary nor productive. ETEC specifically opposed requiring a post-emergency meeting under proposed clauses (e)(1)(A)(iii) and (e)(1)(B)(iii) as "proposed new rule section (c)(1)(C) already contains a general requirement for an after-action report" and such a meeting would occur as a part of preparing the after-action report. ETEC proposed deleting "and post-" to proposed clauses (e)(1)(A)(iii) and (e)(1)(B)(iii) to clarify that separate, additional meetings are not required.

TPPA cautioned that pre-event meetings are not always feasible and recommended modifying proposed clauses (e)(1)(A)(iii) and (e)(1)(B)(iii) accordingly. TPPA also commented that it is unclear the meetings required under (e)(1)(B)(iii), (e)(2)(A)(iv) and (e)(2)(B)(iii) "as required by an entity's EOP, would be considered the activation of an EOP, which would itself generate additional reporting requirements." TEC recommended the meeting requirements under (e)(1)(A)(iii) and (e)(1)(B)(iii) be changed to a reporting requirement describing a utilities' "procedures to review lessons learned from past weather emergency incidents." TEC argued that such a change would better effectuate the intent of the rule "without improperly dictating to electric cooperatives the number of meetings or manner in which a review is conducted."

Commission Response

The commission declines to adopt the specific recommendations of Sharyland, ETEC, TPPA, and TEC for clauses (e)(1)(A)(iii) and (e)(1)(B)(iii) as the commission has substantively addressed these concerns under this heading and under heading (e)(2)(A)(iv) and (e)(2)(B)(iii). Specifically, the commission removes the requirements for pre- and post-event meetings and merges the hot and cold weather annex requirements into a single annex for both transmission and generation entities under proposed subsection (e)(1) and (e)(2), respectively. This change corresponds with a revision of the merged cold and hot weather annexes to include in the required checklist for transmission facility personnel, lessons learned from past responses to a cold or hot weather emergency.

Proposed §25.53(e)(1)(C) - Load Shed Annex

Proposed subsection (e)(1)(C) lists the requirements for a load shed annex that must be included within an EOP.

TPPA opposed the inclusion of a load shed annex in the EOP and recommended deleting (e)(1)(C) from the proposed rule and claimed the Legislature recently affirmed that the commission "must provide discretion for entities to prioritize power delivery and power restoration of critical customers." Alternatively, if the commission rejects TPPA's proposal to remove the load shed annex from (e)(1)(C), TPPA recommended removing language permitting commission staff to request amendments under proposed subsection (c)(4), as conflicting with the statutory language of SB 3, as discussed in that section.

Commission Response

The commission declines to remove the load shed annex requirement from the proposed rule, as requested by TPPA. It is imperative for all transmission and distribution utilities to have a procedure for load shed as part of the required annexes included in its EOP. The commission disagrees with TPPA that this conflicts with the language in SB 3 requiring the commission to provide discretion to entities to prioritize power delivery and power restoration among various critical customers. This rule does not direct how critical loads should be prioritized. The commission also disagrees that allowing commission staff to verify that the requirements of this subparagraph are met and requesting an amendment if they are not diminishes entities' discretion with regards to load shed priorities.

OPUC recommended the commission add subsection (e)(1)(C)(iv) which would additionally require "a procedure or plan for communicating with the public regarding impending load shed whenever possible during an emergency." OPUC expressed understanding that public communication may not be possible in every situation but requested that an effective communication plan be in place where possible in order to "warn and provide the public with valuable information regarding impending load shed events."

Commission Response

The commission agrees with the importance of providing valuable information to customers and the public before and during emergencies, including load shed events. However, the commission declines to adopt OPUC's recommendation to add a requirement in the rule for an electric cooperative, an electric utility, a municipally owned utility, or a transmission and distribution utility to include in its load shed annex "a procedure or plan for communicating with the public regarding impending load shed whenever possible during an emergency," because it is redundant. Adopted subsection (d)(2)(A) of the rule requires an entity with transmission or distribution service operations to have procedures for communicating with the public, customers, and others during an emergency.

Proposed §25.53(e)(1)(C)(i) - Procedures for Load Shed

Proposed subsection (e)(1)(C)(i) requires a load shed annex to contain procedures for controlled shedding of load for planned or forced interruptions of service.

Oncor and TNMP opposed the inclusion of the phrase "whether caused by planned or forced interruption of service" within (e)(1)(C) and recommended striking the language as, in their view, controlled load shedding is historically neither a 'planned interruption' or a 'forced interruption' and instead is a routine event. Oncor and TNMP explained that forced interruptions of service are generally not emergencies that initiate the EOP, as opposed to load shedding. Oncor specifically argued that the proposed rule is also inconsistent with the definition of "forced interruptions" under §25.52 (relating to Reliability and Continuity of Service), which defines forced outages as "(i)nterruptions, exclusive of major events, that result from conditions directly associated with a component requiring that it be taken out of service immediately, either automatically or manually, or an interruption caused by improper operation of equipment or human error." TNMP stated it did not oppose describing its load shed procedures under the (e)(1)(C)(i). Oncor and TNMP provided identical draft language for (e)(1)(C)(i) which deletes the reference to planned or forced interruption of service.

Commission Response

The commission modifies this provision by removing the phrase "whether caused by planned or forced interruption of service," as requested by Oncor and TNMP. The commission emphasizes, however, that a load shed annex must include procedures for the controlled shedding of load, regardless of cause, during an emergency.

Proposed §25.53(e)(1)(C)(iii) - Procedures for Load Shed

Proposed subsection (e)(1)(C)(iii) requires a load shed annex to contain a registry of critical load customers that must be updated at least annually, and contain procedures for maintaining an accurate registry, providing assistance to and communicating with critical load customers, and training staff with respect to serving critical load customers.

CenterPoint, Oncor, AEP, ETEC, and TPPA, opposed the requirement of (e)(1)(C)(iii) requiring a load shed annex to include a registry of critical load customers. Specifically, CenterPoint argued a critical customer registry would contain highly sensitive proprietary customer information and therefore should not be filed publicly or be a part of the EOP. CenterPoint also opposed the inclusion of a process for assisting critical customers in the event of an outage as vague and that an electric utility is not obliged to provide "assistance" to critical customers during an unplanned outage. Similarly, consistent with its confidentiality concerns with the requirement of proposed subsection (c)(1)(A) concerning full unredacted public disclosure of an EOP, AEP opposed filing an unredacted version of the registry of critical load customers with the commission for the same reasons.

ETEC also opposed filing an unredacted version of the registry of critical load customers with the commission as part of the load shed annex as contrary to the existing rule and therefore recommended removal of (e)(1)(C)(iii). ETEC argued that the proposed rule risked "unintended disclosure of sensitive and protected information (including medical information)" and does not provide much value in reviewing an entity's EOP. ETEC recommended that the EOP should "continue to include the location of the registry and the methods used to maintain its accuracy" to ensure a list of critical customers is available to the entity's operating personnel.

Consistent with its comments raising First Amendment concerns with commission staff review of communications plans under proposed subsection (d)(5), TPPA raised the same First Amendment concerns specifically regarding proposed subsection (e)(1)(C)(iii). In TPPA's view, the proposed rule is beyond the scope of SB 3 in requiring a registry of critical load customers and creates a "fundamental customer privacy issue that may prove counterproductive to critical load registration efforts." Specifically, TPPA claimed that customers may be more reluctant to seek critical status if their information will be shared with a state agency. TPPA further argued that the requirement to update the load shed annex every time a customer is added or removed would be administratively burdensome. Lastly, TPPA maintained that the requirement would be misleading to critical load customers, as critical load status does not guarantee that load shed will not occur.

Oncor and TNMP also opposed the requirement of (e)(1)(C)(iii) and recommended it be removed from the rule. Oncor elaborated that only a small portion of critical load customers are totally exempted from load shed for health and welfare reasons and that the current rule conflicts with its business model and billing system and thus would be misleading to use and therefore not useful. Further, Oncor and TNMP argued that (e)(1)(C)(iii) is ambiguous and that the rule must clarify which "critical load customers" should be on the registry required under (e)(1)(C)(iii). Specifically, Oncor and TNMP requested clarification on whether the term "critical load customers" is inclusive of the all the customers identified in §25.52(c)(1) - (2) (relating to Reliability and Continuity of Service) and §25.497 (relating to Critical Load Customers) as well as Texas Water Code (TWC) §13.1396 (relating to Coordination of Emergency Operations) or whether the term is inclusive only of customers considered "critical loads" as defined in §§25.5(21) (relating to Definitions) and §25.52(c)(1).

Additionally, Oncor opposed the inclusion of the phrase "directly served, if maintained by an electric utility, an electric cooperative, or a municipally owned utility" as it appears to modify "critical load customers" and is thus unclear. Oncor stated it is "not responsible for and has no knowledge of critical load customers that may be served behind a wholesale distribution point of delivery." Oncor emphasized that such communication informs wholesale customers of a load shed event, and it is "incumbent on electric providers... to communicate with their retail customers." Oncor recognized that the current version of §25.53 includes a similar provision, but expressed that the term is undefined and maintained that "the primary assistance utilities provide to critical load customers is the restoration of their electric service." TNMP expressed concern that including the list of critical customer names within the load shed plan could be confusing to critical customers. Specifically, inclusion on the critical customer list does not ensure exemption from load shed except for customers that are determined to be critical to public health, community welfare, or supporting the integrity of the electric system, and thus prioritized. TNMP further recommended that the critical load customer registry should be included in a separate, dedicated annex to avoid procedural confusion.

Commission Response

CenterPoint, ARM, ETEC, and TPPA's concerns regarding confidentiality are substantively addressed by the commission's revision to proposed subsection (c)(1)(A) permitting a summary of the EOP and full redacted EOP to be filed with the commission, as addressed under headings (c), (c)(1), and (c)(1)(A). Further, the commission agrees with TNMP, Oncor, and TPPA's recommendations and revises the language of adopted subsection (e)(1)(C)(iii) to clarify that an entity must only submit a procedure for maintain an accurate registry of critical load customers. The commission further modifies the requirement to clarify that this registry must include critical load customers as defined under 16 TAC §25.5(22), §25.52(c)(1) - (2) and §25.497 and TWC §13.1396. The commission also adds language that this procedure must include the entity's process for coordinating with government and service agencies as necessary during an emergency.

Proposed §25.53(e)(1)(E) - Wildfire annex

Proposed subsection (e)(1)(E) requires an electric cooperative, an electric utility, a municipally owned utility, or a transmission and distribution utility to include in its EOP a wildfire annex for its transmission and distribution facilities.

Consistent with its recommendations for subsection (e)(1)(A)(i) and (e)(1)(B)(i) requiring a cold and hot weather emergency response annex to be included in the EOP, ETEC recommended limiting clauses (e)(1)(A)(i) and (e)(1)(B)(i) to wildfire annexes only and deleting the reference to a mitigation plan for hazards associated with wildfires.

Commission Response

The commission agrees with ETEC's recommendation for proposed (e)(1)(E). Consistent with the commission's response to ETEC's recommendations for proposed subsection (e)(1)(A)(i) and (e)(1)(B)(i), the commission agrees that mitigation plans are separate from an EOP. The commission accepts ETEC's proposed revision to (e)(1)(E).

TPPA recommended the requirement for a wildfire emergency annex under (e)(1)(E) be limited to "transmission and distribution entities serving counties predominantly of 'Medium to High Risk' or 'High Risk,' as described by Texas A&M Forest Service's Texas Wildfire Risk Explorer or an alternative source" in order to more effectively allocate a utility's resources.

Commission Response

The commission declines to adopt TPPA's recommendation to qualify the requirement for a wildfire emergency annex under proposed (e)(1)(E). Texas A&M Forest Services' Texas Wildfire Risk Explorer identifies most counties as at least "Medium to High Risk." Even if the commission accepted the recommendation to limit (e)(1)(E) to "counties predominantly of 'Medium to High Risk' or 'High Risk,'" the challenge becomes defining "predominantly." Further, the commission agrees that organizational needs vary by entity, as do potential hazards and threats. Accordingly, adopted subsection (d) provides that if an entity deems that a certain provision does not apply to an entity, including the requirement for a wildfire emergency annex, the entity is able to include an explanation in its EOP.

Proposed §25.53(e)(1)(G) and (e)(1)(H) - Cybersecurity Annex and Physical Security Annex (Transmission and Distribution)

Proposed subsection (e)(1)(G) and (e)(1)(H) requires an electric cooperative, an electric utility, a municipally owned utility, or a transmission and distribution utility to include in its EOP for its transmission and distribution facilities, a cybersecurity and a physical security annex.

CenterPoint, Oncor, Sharyland, AEP, and TNMP opposed the inclusion of (e)(1)(G) and (e)(1)(H) in the proposed rule and recommended the subparagraphs be deleted. CenterPoint stressed that "the information... contained in these annexes is too sensitive to be filed in unredacted form, even under seal." CenterPoint expressed willingness to provide commission staff access to such annexes upon request but argued that such annexes should not be filed. Oncor argued that cybersecurity and physical security are addressed by other means via implementation of SB 64, SB 936, §25.367 (relating to Cybersecurity Monitor), and NERC Reliability Standards. Sharyland further cited Department of Energy reporting requirements as a pre-existing reporting obligation. AEP generally expressed its opposition citing that the proposed provisions are unnecessary "due to regulation and monitoring by multiple other existing means and the sensitivity of the subject matter."

TNMP emphasized the redundancy of filing cybersecurity and physical security annexes due to pre-existing NERC requirements and further argued that the sensitive nature of the system and operational data should preclude public filing in order to preserve grid security. TNMP alternatively recommended that if the commission preserves the requirements of (e)(1)(G) and (e)(1)(H), that the commission permit utilities to file a "summary description" of each. SPS opposed the inclusion of proposed subsection (e)(2)(G) - (H) in addition to (e)(1)(G) - (H), citing confidentiality and disclosure concerns. Unlike TNMP, SPS opposed providing a summary of the annexes citing compliance with NERC requirements and separate fulfilment of disclosure with the commission under §25.367. SPS concluded that the EOP is operationally based and therefore should not include sensitive information. TCPA emphasized that the cybersecurity annex under proposed subsection (e)(1)(G) should be "carefully scoped to avoid heightened risks associated with public disclosure" and recommended removal of the requirement for "any additional annexes as needed or appropriate to the entity's particular circumstances" as duplicative. For proposed subsection (e)(1)(H) specifically, ETEC argued that it is unclear "what type of physical threat the commission is envisioning." Specifically, ETEC commented that a physical security threat like sabotage is normally affects a single site and would not require activation of the EOP. ETEC continued that the EOP is intended for larger-scale events and, absent further clarification by the commission, recommended deletion of subsection (e)(1)(H). However, ETEC supported the inclusion of subsection (e)(2)(H) for generation assets and highlighted the importance of physical security for such facilities.

Commission Response

The commission understands the sensitivity of cyber and physical security annexes and agrees with the disclosure, confidentiality, and general concerns of CenterPoint, Oncor, Sharyland, AEP, TNMP, SPS, TCPA, and ETEC. As discussed under heading (c), the commission revises the rule to require an entity to file a summary of the EOP with citations identifying where the entity's plan addresses the rule's minimum requirements, including cyber and physical security annexes, and a complete copy of the plan with the confidential portions removed. The commission further agrees with CenterPoint's recommendation that a copy of such annexes be made available to the commission for review upon request. The rule does not require an entity to develop emergency procedures that might conflict with existing NERC regulatory standards but does provide the commission the opportunity to review and analyze those plans as part of preparing its report to the Legislature.

Proposed §25.53(e)(2) - Required Annexes (Generation)

Proposed subsection (e)(2) is the header section for the list of annexes an electric cooperative, an electric utility, a municipally owned utility, or a PGC must include in its EOP for its generation resources.

AEP, Oncor, CenterPoint, and TNMP commented that the annexes required under proposed subsection (e)(2) for generation entities are redundant due to pre-existing reporting obligations under PURA §39.918(g). AEP argued that failing to exclude emergency generation facilities authorized under PURA §39.918 from ordinary "generation resources", would require TDUs to provide numerous, superfluous, and redundant annexes as emergency power restoration facilities are authorized to be used only in cases when widespread outages are already occurring.

AEP further contended that the proposed rule does not address the statutory requirement of PURA §39.918(g) which "requires a TDU that leases and operates facilities under PURA §39.918(b)(1) or that procures, owns, and operates facilities under PURA §39.918(b)(2) to include in the utility's EOP a detailed plan on the utility's use of those facilities." Oncor and TNMP also expressed redundancy concerns, arguing that emergency power generation resources under PURA §39.918 should not be considered "generation resources" for subsection (e)(2) and instead recommended the facilities be explicitly excluded. Oncor and TNMP argued that a restoration plan exclusive to emergency power generation resources would govern any operational plans and requirements for such facilities and therefore there is no need to develop separate plans and annexes for purposes of (e)(2)(A) through (I) as such matters have already been addressed.

Accordingly, AEP, Oncor, CenterPoint, and TNMP provided draft language specifically excluding generation resources authorized under PURA §39.918 from the annex requirements of proposed subsection (e)(2). TNMP also provided draft language for subsection (e)(2) and proposed new subsection (e)(6) to provide for PURA §39.918(g) which requires a TDU that leases, operates, or owns facilities under §39.918(b) to include "a detailed plan for the use of those facilities" in its emergency operations plan.

Commission Response

The commission agrees with AEP, Oncor, TNMP, and CenterPoint that the proposed rule should include language to reflect the requirement under PURA §39.918(g) for a transmission and distribution utility to include in its EOP a detailed plan for the use of facilities that provide temporary emergency electric energy. The commission also agrees that the requirement should not result in a transmission and distribution utility filing superfluous or redundant plans. The commission revises the rule as recommended by AEP and TNMP.

Proposed §25.53(e)(2)(A) and (e)(2)(B) - Cold Weather and Hot Weather Emergency Annexes (Generation)

Proposed subsection (e)(2)(A) and (e)(2)(B) require entities to file cold and hot weather annexes that include operational plans that are "separate and distinct" from the weather preparations required under §25.55.

TCPA and TEC argued that the requirement that these operational plans be "separate and distinct" is ambiguous and should be removed. TEC argued the phrase is confusing as it is unclear how such plans would be "separate and distinct" from plans required under §25.55 (relating to Weather Emergency Preparedness). TCPA argued that subsection (e)(2)(A) and (e)(2)(B) significantly overlap with the planning requirements of §25.55 and recommended that preparations made under §25.55 should be able to fulfill the requirements of (e)(2)(A) and (e)(2)(B).

Commission Response

Consistent with the commission's response to similar concerns raised under clauses (e)(1)(A)(i) and (e)(1)(B)(i), the commission agrees with the assessments of TCPA and TEC regarding the ambiguity of the requirements in the proposed rule that the hot and cold weather annexes be "separate and distinct from the weather preparation standards required under §25.55." The commission revises the rule to remove these requirements to provide entities with necessary discretion and to avoid unintentionally creating dual standards.

Proposed §25.53(e)(2)(A)(iv) and (e)(2)(B(iv) - Cold Weather and Hot Weather Pre- and Post- Emergency Meetings (Generation)

Proposed clauses (e)(2)(A)(iv) and (e)(2)(B)(iv) both require pre- and post-weather emergency meetings for generation resources to review lessons learned from cold weather and hot weather emergency incidents and to ensure necessary supplies and personnel are available through the weather emergency.

TCPA endorsed the general objective of clauses (e)(2)(A)(iv) and (e)(2)(B)(iv) but commented that the imposed requirements are overly-prescriptive as meetings may be inefficient means of communication. Instead, TCPA recommended revising (e)(2)(A)(iv) and (e)(2)(B)(iv) to generally require that generators have a plan for communicating lessons learned with relevant personnel and to ensure adequate supplies and staffing for emergencies. Consistent with its recommendations for (e)(1)(A)(iii) and (e)(1)(B)(iii), TPPA recommended modifying this provision to only require pre-event meetings when feasible.

Commission Response

The commission declines to adopt the specific recommendations of TCPA and TPPA for proposed clauses (e)(2)(A)(iv) and (e)(2)(B)(iii) and instead deletes both clauses. This change corresponds with a revision and consolidation of (e)(2)(A) and (e)(2)(B) to include, in the required checklist for generation resource personnel, lessons learned from past responses to a cold or hot weather emergency. The commission maintains these changes substantially address the concerns of commenters.

Proposed §25.53(e)(2)(G) and (e)(2)(H) - Cybersecurity Annex and Physical Security Annex (Generation)

Proposed subsection (e)(2)(G) and (H) require an electric cooperative, an electric utility, a municipally owned utility, or a PGC to include in its EOP for its generation resources a cybersecurity and physical security annex.

Consistent with its recommendations for clauses (e)(1)(G) and (e)(1)(H), AEP and SPS opposed the inclusion of (e)(2)(G) and (e)(2)(H) and recommended the provisions be removed from the proposed rule due to pre-existing regulation and monitoring as well as confidentiality concerns.

Enbridge opposed the inclusion of proposed subsection (e)(2)(G) and (e)(2)(H) and recommended the provisions be removed. Like SPS, Enbridge cited that "disclosure of the (cybersecurity and physical security) policies and protections outside of an entity's secure network represents an inherent threat to the life, property, and systems required to operate generation resources safely and reliably." As an alternative, Enbridge recommended the commission change the requirement that entities "confirm their policies are aligned to leading industry standards and guidelines" such as from the National Institute of Standards and Technology, the Department of Homeland Security, and the International Organization of Standardization. Enbridge provided draft language consistent with its recommendation for each subparagraph to only confirm the existence of a cybersecurity and physical security annex without disclosing either, an assurance that both annexes are incorporated into the entity's broader EOP, and that relevant staff are trained annually on each.

Commission Response

The commission acknowledges the sensitivity of cyber and physical security annexes and agrees with the disclosure and confidentiality concerns of SPS, AEP, and Enbridge. As discussed under heading (c), the commission revises the rule to require an entity to file a summary of the EOP with citations identifying where the entity's plan addresses the rule's minimum requirements, including cyber and physical security annexes and a complete, redacted version of the plan with the confidential portions removed. The rule does not require an entity to develop emergency procedures that might conflict with existing NERC regulatory standards but does provide the commission the opportunity to review and analyze those plans as part of preparing its report to the Legislature.

Proposed §25.53(e)(4) - Required ERCOT Annexes

Proposed subsection (e)(4) requires ERCOT to include a pandemic annex, weather emergency annex, hurricane annex, a cybersecurity annex, a physical security annex, and any additional annexes as needed or appropriate under proposed subsection (e)(4)(A) through (e)(4)(F), respectively.

TPPA recommended that any annex required of an entity's EOP under the proposed rule also be required of ERCOT's EOP, including the requirement of pre- (where feasible) and post-weather emergency meetings and a wildfire annex.

Commission Response

The commission disagrees with TPPA that every EOP requirement should apply equally to ERCOT. ERCOT plays a unique role in the management of the grid and it is unclear why ERCOT should be required to file each of the annexes required of other entities. For example, ERCOT does not serve load and, therefore, does not need a load shed annex.

Proposed §25.53(f) - Drills

Proposed subsection (f) requires an entity to conduct annual drills to test and subsequently assess its EOP's effectiveness if the EOP has not been activated in response to an incident within the last twelve months. Entities must notify commission staff of the planned annual drill at least 30 days prior of at least one drill each year, in the form and manner prescribed by the commission and appropriate TDEM District Coordinators. Additionally, subsection (f) requires an entity that operates in a hurricane evacuation zone to test its hurricane annex annually.

CenterPoint, Oncor, and TNMP commented that the language in subsection (f) regarding the 12-month drill requirement is ambiguous in its applicability. CenterPoint and Oncor provided draft language for proposed subsection (f) specifying that the requirement is "per calendar year."

Commission Response

The commission agrees with CenterPoint, Oncor, and TNMP that the annual drill requirement under proposed subsection (f) should be unambiguous and adopts Oncor and TNMP's draft language regarding the same as it best effectuates the intent of the rule to ensure an EOP is either utilized or drilled at least once each calendar year.

City of Houston recommended that drills required under subsection (f) should be coordinated with drills by applicable local governments or agencies affected by or noted in the EOP and annex prior to the execution of the drill to ensure coordination and communication between such organizations.

Commission Response

An entity is not prohibited from coordinating drills with other local entities, but the commission declines to adopt City of Houston's recommendation to require them to do so. The commission agrees that coordination with local entities is important and addresses this topic in adopted subsection (d)(2), as discussed under heading (d)(5), which requires an EOP to include a communications plan for communicating with, among other organizations, local governments, and in proposed subsection (f) which requires entities to coordinate with appropriate TDEM District Coordinators following annual drills or implementation of an EOP.

TPPA commented the drills required under proposed subsection (f) are outside of the scope of Tex. Util. Code §186.007 which, in TPPA's view, is intended to "improve EOP filings with the commission to ensure transparency and a common working understanding among all parties involved in an emergency." TPPA recommended the commission modify the proposed rule to more closely reflect the relevant statutory provisions and delete proposed subsection (f). Alternatively, TPPA recommended that proposed subsection (f) exempt MOUs as it conflicts with the commission's limited jurisdiction over MOUs under PURA §40.004. As a further alternative, TPPA requested the commission clarify what exercises constitute a "drill" as the term is ambiguous. TEC similarly recommended that an electric cooperative that does not operate a transmission facility or generation resource be exempt from the requirements of subsection (f) and instead require electric cooperatives to submit a summary of its drilling plans.

Commission Response

The commission disagrees with TPPA and TEC's requests to limit the application of proposed subsection (f) to certain entities. Tex. Util. Code §186.007 requires the commission to evaluate the preparedness of the industry to respond to emergencies. The commission requires all affected entities listed under adopted subsection (a) to conduct a drill as a means to self-evaluate its own level of preparedness, the results of which are reflected in material changes to the EOP filed with the commission.

In response to TPPA's request for clarification on what constitutes a drill, the commission does not prescribe specific requirements for drills, beyond requiring them to be operations-based. An entity should use its best judgment in determining what type of exercise appropriately tests its operational preparedness.

EPEC commented that, in order to comply with subsection (f), a utility may need to increase the number and types of drills, which would require time to develop and implement. As such, EPEC recommended the April 1, 2022 date of compliance under proposed subsection (c)(1) be extended.

Commission Response

The commission disagrees with EPEC's request for an extended compliance period past the April 15, 2022, initial filing deadline. The commission requires sufficient time to thoroughly review and evaluate existing EOPs. Moreover, the commission notes that an entity is not required to conduct a drill by April 15, 2022. An entity is required to conduct a drill annually and attest that it has completed all required drills. If the required annual drill is completed after April 15, 2022, its completion can be attested to in subsequent annual filings.

OPUC endorsed requiring annual drills to assess the effectiveness of utilities' EOPs. However, OPUC argued that 12 months is a significant length of time to allow an un-tested EOP to remain in place and recommended that if a utility files a new EOP or updates a pre-existing EOP, the utility must conduct a drill within three months of filing. OPUC provided draft language consistent with its recommendation.

Commission Response

The commission disagrees with OPUC on the need for a new or updated EOP to conduct a drill on a shortened timeline. The requirement to conduct a drill on an EOP within the calendar year is sufficient and requiring more frequent drilling could unintentionally overburden an entity that is making a diligent effort to keep its EOP up to date.

SPS recommended that the term "emergency" replace the use of the word "incident" in subsection (f) for consistency with the rule as a whole and provided draft language for the same.

Commission Response

The commission agrees with SPS that replacing the term "incident" with the defined term "emergency" better clarifies the intention of this language in subsection (f) and makes the change.

Proposed §25.53(g) - Reporting Requirements

Proposed subsection (g) requires entities upon activation of the State Operations Center by TDEM and subsequent request by commission staff, to provide updates on the status of operations, outages, and restoration efforts until all incident-related outages are restored or unless otherwise notified by commission staff. Additionally, subsection (g) permits commission staff to request, at their discretion, an after action or lessons learned report to be filed by an affected entity by a certain date.

CenterPoint, ETEC, and SPS all recommended similar changes to proposed subsection (g). CenterPoint recommended changing the heading of subsection (g) from "Reporting Requirements" to "Emergency contacts and status updates during an emergency" to more accurately describe the contents of the subsection and to minimize confusion with other reporting requirements required under proposed §25.53. Additionally, consistent with their recommendations for the deletion of subsection (d)(3), CenterPoint and SPS recommended moving the emergency contact requirement of subsection (d)(3) to subsection (g). SPS further specified that the dissemination of such information from a utility to the commission be done through an electronic internet portal or other secure mechanism.

Commission Response

The commission disagrees with CenterPoint on changing the heading for subsection (g) as the current title adequately encompasses the purpose of the subsection. The commission also declines to move the emergency contact requirement of proposed subsection (d)(3) into subsection (g) per CenterPoint and SPS's recommendation as that requirement has been moved to subsection (c)(4) as a filing separate from the EOP.

CenterPoint and ETEC recommended deletion of the last sentence of subsection (g) which allows commission staff to request an after action or lessons learned report from an affected entity by a certain date. CenterPoint stated that the sentence is unnecessary given the requirement in proposed subsection (c)(1)(C) for utilities to file annual reports and based on PURA §§14.201-14.207, which permit commission staff to request these reports on a more frequent basis.

ETEC also asserted that the last sentence of proposed subsection (g) regarding entity reporting requirements, which requires entities to file an after-action report be filed by an entity if directed to do so by the commission staff, was "redundant" as after-action reports are required for all events under proposed subsection (c)(1)(C). As such, ETEC also suggested deleting this reporting requirement from proposed subsection (c)(1)(C).

Commission Response

The commission also disagrees with CenterPoint and ETEC on removing the last sentence of subsection (g), which requires after-action and lessons learned reports from entities to be submitted with the commission after an emergency. The commission maintains that to effectuate the intent of the proposed rulemaking, commission staff must be able to require an entity to file documents relevant to emergency preparedness. It is foreseeable that emergency status updates, after action reports, or lessons learned reports may not be filed by entities as required under proposed subsection (c) or elsewhere in the proposed rule. Therefore, it is necessary for commission staff to retain discretionary authority to request updates or reports from entities as such documents are necessary for comprehensive emergency preparedness. The commission has also made the after-action reporting requirement less onerous by permitting a summary and redacted version of the EOP to be filed with the commission as discussed under headings (c), (c)(1), and (c)(1)(A) as well as deleting the separate after-action reporting requirement under heading (c)(1)(C) relating to the same.

SPS recommended, consistent with its recommendations and concerns regarding utility discretion in planning and for subsection (c)(4) and comments on supplemental reporting for proposed subsection (d)(1) through (d)(4), if its recommendations for subsection (b)(3) defining the term "Emergency" are not accepted by the commission, that events for which after action or lessons learned reporting is required be limited to instances where an emergency has been declared by "a local, state, or federal government; ERCOT; or a Reliability Coordinator that is applicable to the entity." SPS maintained that such a change ensures reporting is "appropriately scoped to target events that present a credible risk to the continuity of service" and are only classified as an emergency "if the circumstances are of sufficient magnitude that emergency conditions are declared by entities empowered to coordinate regional or state-wide responses to such event." SPS provided draft language consistent with its recommendation.

Commission Response

The commission agrees with SPS regarding to what constitutes an emergency, however, declines to adopt SPS' specific language for subsection (g) as SPS' concerns are substantially addressed by the commission's amendments to other rule provisions. Specifically, the revisions to the definition of "emergency" under adopted subsection (b)(3), the movement of the emergency contacts requirement to adopted (c)(4)(B) as a filing separate from the EOP, and that documents under subsection (c)(4) may be filed confidentially. Therefore, SPS' recommendations for subsection (g) are unnecessary.

Consistent with its comments regarding procedural rights and recommendations regarding subsection (c)(4)(A) and (c)(4)(B), TCPA highlighted its due process concerns with the last sentence of the subsection permitting permission staff to request action or lessons learned reports and file them with the commission by a specific date. TCPA argued that this sentence should be revised to specify that the commission, not commission staff, may require such reporting. TCPA noted that this recommendation is only for the reporting requirement in subsection (g), "as it would be inefficient and potentially infeasible to produce a commission order for the in-event updates contemplated in the first part of subsection (g)." TCPA stated that, if its proposal is adopted by the commission, commission orders generally provide deadlines for response, and as such the date specification in the last sentence of (g) should be deleted. Similarly, TPPA argued that requests for after action or lessons learned reports are proper only from the commission, not its staff. TPPA further commented that any additional reporting requirements such as those contemplated by subsection (f) should be considered extraneous to the EOP itself for purposes of filing the EOP.

Commission Response

The commission disagrees with TCPA and TPPA that proposed subsection (g) poses a threat to the constitutional due process rights of entities and that commission staff do not have the authority to request EOP updates under subsection (g) or changes as stated elsewhere in the rule. The commission has substantively addressed these concerns under the General Comment heading and headings (c)(4) and (d)(5).

Oncor and TNMP recommended that subsection (g) be revised to clarify that once "service has been restored to all customers capable of receiving service," updates from the utility to the commission are no longer required. Oncor and TNMP elaborated that providing continuous updates on restoration activities for customers unable to receive electric service, potentially for weeks or months, is unlikely to benefit those customers or the commission. Oncor and TNMP provided identical draft language consistent with their recommendations.

Commission Response

The commission agrees with Oncor and TNMP that the language in proposed subsection (g) should be revised to clarify that updates should only be issued until service is restored to customers capable of receiving service. The commission modifies the adopted rule accordingly.

TEC noted that the current version of the reporting requirements that appears in proposed subsection (g) applies only to "affected" entities during an activation of the State Operations Center (SOC) by TDEM. TEC suggested the term "affected" remain in the proposed rule to avoid situations where a utility may be required to report to commission staff when it or its customers are entirely unaffected by an emergency event, such as a utility located in the Panhandle being forced to report during a hurricane in the Gulf of Mexico.

Commission Response

The commission agrees with TEC's recommendation and adds language to subsection (g) clarifying the applicability to affected entities.

All comments, including any not specifically referenced herein, were fully considered by the commission. In adopting this rule, the commission makes other minor modifications for the purpose of clarifying its intent.

16 TAC §25.53

Statutory Authority

The rule is repealed under the following provisions of PURA: §14.001, which provides the commission the general power to regulate and supervise the business of each public utility within its jurisdiction and to do anything specifically designated or implied by PURA that is necessary and convenient to the exercise of that power and jurisdiction, and §14.002, which provides the commission with the authority to make, adopt, and enforce rules reasonably required in the exercise of its powers and jurisdiction.

Cross reference to statute: PURA §14.001 and 14.002.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on February 28, 2022.

TRD-202200709

Andrea Gonzalez

Rules Coordinator

Public Utility Commission of Texas

Effective date: March 20, 2022

Proposal publication date: December 17, 2021

For further information, please call: (512) 936-7244


16 TAC §25.53

Statutory Authority

The new rule is adopted under the following provisions of PURA §14.001, which provides the commission the general power to regulate and supervise the business of each public utility within its jurisdiction and to do anything specifically designated or implied by PURA that is necessary and convenient to the exercise of that power and jurisdiction, and §14.002, which provides the commission with the authority to make, adopt, and enforce rules reasonably required in the exercise of its powers and jurisdiction. The rule is also adopted under Tex. Util. Code §186.007, which requires the commission to: analyze the EOPs developed by electric utilities, power generation companies, municipally owned utilities, electric cooperatives that operate generation facilities in this state, and retail electric providers; prepare a weather emergency preparedness report; and require entities to submit updated EOPs if the EOP on file does not contain adequate information to determine whether the entity can provide adequate electric services.

Cross reference to statutes: PURA §14.002 and Tex. Util. Code §186.007.

§25.53.Electric Service Emergency Operations Plans.

(a) Application. This section applies to an electric utility, transmission and distribution utility, power generation company (PGC), municipally owned utility, electric cooperative, and retail electric provider (REP), and to the Electric Reliability Council of Texas (ERCOT).

(b) Definitions.

(1) Annex -- a section of an emergency operations plan that addresses how an entity plans to respond in an emergency involving a specified type of hazard or threat.

(2) Drill -- an operations-based exercise that is a coordinated, supervised activity employed to test an entity's EOP or a portion of an entity's EOP. A drill may be used to develop or test new policies or procedures or to practice and maintain current skills.

(3) Emergency -- a situation in which the known, potential consequences of a hazard or threat are sufficiently imminent and severe that an entity should take prompt action to prepare for and reduce the impact of harm that may result from the hazard or threat. The term includes an emergency declared by local, state, or federal government, or ERCOT or another reliability coordinator designated by the North American Electric Reliability Corporation and that is applicable to the entity.

(4) Entity -- an electric utility, transmission and distribution utility, PGC, municipally owned utility, electric cooperative, REP, or ERCOT.

(5) Hazard -- a natural, technological, or human-caused condition that is potentially dangerous or harmful to life, information, operations, the environment, or property, including a condition that is potentially harmful to the continuity of electric service.

(6) Threat -- the intention and capability of an individual or organization to harm life, information, operations, the environment, or property, including harm to the continuity of electric service.

(c) Filing requirements.

(1) An entity must file an emergency operations plan (EOP) and executive summary under this section by April 15, 2022. Notwithstanding the foregoing, a municipally owned utility must provide its EOP and executive summary in the manner prescribed by the commission in this paragraph no later than June 1, 2022. Each individual entity is responsible for compliance with the requirements of this section. An entity filing a joint EOP or other joint document under this section on behalf of one or more entities over which it has control is jointly responsible for each entity's compliance with the requirements of this section.

(A) An entity must file with the commission:

(i) an executive summary that:

(I) describes the contents and policies contained in the EOP;

(II) includes a reference to specific sections and page numbers of the entity's EOP that correspond with the requirements of this rule;

(III) includes the record of distribution required under paragraph (4)(A) of this subsection; and

(IV) contains the affidavit required under paragraph (4)(C) of this subsection; and

(ii) a complete copy of the EOP with all confidential portions removed.

(B) For an entity with operations within the ERCOT power region, the entity must submit its unredacted EOP in its entirety to ERCOT.

(C) ERCOT must designate an unredacted EOP submitted by an entity as Protected Information under the ERCOT Protocols.

(D) An entity must make its unredacted EOP available in its entirety to commission staff on request at a location designated by commission staff.

(E) An entity may file a joint EOP on behalf of itself and one or more other entities over which it has control provided that:

(i) the executive summary required under subparagraph (A)(i) of this paragraph identifies which sections of the joint EOP apply to each entity; and

(ii) the joint EOP satisfies the requirements of this section for each entity as if each entity had filed a separate EOP.

(F) An entity filing a joint EOP under subparagraph (E) of this paragraph may also jointly file one or more of the documents required under paragraph (4) of this subsection provided that each joint document satisfies the requirements for each entity to which the document applies.

(G) An entity that is required to file similar annexes for different facility types under subsection (e) of this section, such as a pandemic annex for both generation facilities and transmission and distribution facilities, may file a single combined annex addressing the requirement for multiple facility types. The combined annex must conspicuously identify the facilities to which it applies.

(2) A person seeking registration as a PGC or certification as a REP must meet the filing requirements under paragraph (1)(A) of this subsection at the time it applies for registration or certification with the commission and must submit the EOP to ERCOT if it will operate in the ERCOT power region, no later than ten days after the commission approves the person's registration or certification.

(3) An entity must continuously maintain its EOP. Beginning in 2023, an entity must annually update information included in its EOP no later than March 15 under the following circumstances:

(A) An entity that in the previous calendar year made a change to its EOP that materially affects how the entity would respond to an emergency must:

(i) file with the commission an executive summary that:

(I) describes the changes to the contents or policies contained in the EOP;

(II) includes an updated reference to specific sections and page numbers of the entity's EOP that correspond with the requirements of this rule;

(III) includes the record of distribution required under paragraph (4)(A) of this subsection; and

(IV) contains the affidavit required under paragraph (4)(C) of this subsection;

(ii) file with the commission a complete, revised copy of the EOP with all confidential portions removed; and

(iii) submit to ERCOT its revised unredacted EOP in its entirety if the entity operates within the ERCOT power region.

(B) An entity that in the previous calendar year did not make a change to its EOP that materially affects how the entity would respond to an emergency must file with the commission:

(i) a pleading that documents any changes to the list of emergency contacts as provided under paragraph (4)(B) of this subsection;

(ii) an attestation from the entity's highest-ranking representative, official, or officer with binding authority over the entity stating the entity did not make a change to its EOP that materially affects how the entity would respond to an emergency; and

(iii) the affidavit described under paragraph (4)(C) of this subsection.

(C) An entity must update its EOP or other documents required under this section if commission staff determines that the entity's EOP or other documents do not contain sufficient information to determine whether the entity can provide adequate electric service through an emergency. If directed by commission staff, the entity must file its revised EOP or other documentation, or a portion thereof, with the commission and, for entities with operations in the ERCOT power region, with ERCOT.

(D) ERCOT must designate any revised unredacted EOP submitted by an entity as Protected Information under the ERCOT Protocols.

(E) An entity must make a revised unredacted EOP available in its entirety to commission staff on request at a location designated by commission staff.

(F) The requirements for joint and combined filings under paragraph (1) of this subsection apply to revised joint and revised combined filings under this paragraph.

(4) In accordance with the deadlines prescribed by paragraphs (1) and (3) of this subsection, an entity must file with the commission the following documents:

(A) A record of distribution that contains the following information in table format:

(i) titles and names of persons in the entity's organization receiving access to and training on the EOP; and

(ii) dates of access to or training on the EOP, as appropriate;

(B) A list of primary and, if possible, backup emergency contacts for the entity, including identification of specific individuals who can immediately address urgent requests and questions from the commission during an emergency; and

(C) An affidavit from the entity's highest-ranking representative, official, or officer with binding authority over the entity affirming the following:

(i) relevant operating personnel are familiar with and have received training on the applicable contents and execution of the EOP, and such personnel are instructed to follow the applicable portions of the EOP except to the extent deviations are appropriate as a result of specific circumstances during the course of an emergency;

(ii) the EOP has been reviewed and approved by the appropriate executives;

(iii) drills have been conducted to the extent required by subsection (f) of this section;

(iv) the EOP or an appropriate summary has been distributed to local jurisdictions as needed;

(v) the entity maintains a business continuity plan that addresses returning to normal operations after disruptions caused by an incident; and

(vi) the entity's emergency management personnel who are designated to interact with local, state, and federal emergency management officials during emergency events have received the latest IS-100, IS-200, IS-700, and IS-800 National Incident Management System training.

(5) Notwithstanding the other requirements of this subsection, ERCOT must maintain its own current EOP in its entirety, consistent with the requirements of this section and available for review by commission staff.

(d) Information to be included in the emergency operations plan. An entity's EOP must address both common operational functions that are relevant across emergency types and annexes that outline the entity's response to specific types of emergencies, including those listed in subsection (e) of this section. An EOP may consist of one or multiple documents. Each entity's EOP must include the information identified below, as applicable. If a provision in this section does not apply to an entity, the entity must include in its EOP an explanation of why the provision does not apply.

(1) An approval and implementation section that:

(A) introduces the EOP and outlines its applicability;

(B) lists the individuals responsible for maintaining and implementing the EOP, and those who can change the EOP;

(C) provides a revision control summary that lists the dates of each change made to the EOP since the initial EOP filing pursuant to subsection (c)(1) of this section;

(D) provides a dated statement that the current EOP supersedes previous EOPs; and

(E) states the date the EOP was most recently approved by the entity.

(2) A communication plan.

(A) An entity with transmission or distribution service operations must describe the procedures during an emergency for handling complaints and for communicating with the public; the media; customers; the commission; the Office of Public Utility Counsel (OPUC); local and state governmental entities, officials, and emergency operations centers, as appropriate in the circumstances for the entity; the reliability coordinator for its power region; and critical load customers directly served by the entity.

(B) An entity with generation operations must describe the procedures during an emergency for communicating with the media; the commission; OPUC; fuel suppliers; local and state governmental entities, officials, and emergency operations centers, as appropriate in the circumstances for the entity; and the applicable reliability coordinator.

(C) A REP must describe the procedures for communicating during an emergency with the public, media, customers, the commission, and OPUC, and the procedures for handling complaints during an emergency.

(D) ERCOT must describe the procedures for communicating, in advance of and during an emergency, with the public, the media, the commission, OPUC, governmental entities and officials, the state emergency operations center, and market participants.

(3) A plan to maintain pre-identified supplies for emergency response.

(4) A plan that addresses staffing during emergency response.

(5) A plan that addresses how an entity identifies weather-related hazards, including tornadoes, hurricanes, extreme cold weather, extreme hot weather, drought, and flooding, and the process the entity follows to activate the EOP.

(6) Each relevant annex, as detailed in subsection (e) of this section, and other annexes applicable to an entity.

(e) Annexes to be included in the emergency operations plan.

(1) An electric utility, a transmission and distribution utility, a municipally owned utility, and an electric cooperative a must include in its EOP for its transmission and distribution facilities the following annexes:

(A) A weather emergency annex that includes:

(i) operational plans for responding to a cold or hot weather emergency, distinct from the weather preparations required under §25.55 of this title (relating to Weather Emergency Preparedness); and

(ii) a checklist for transmission or distribution facility personnel to use during cold or hot weather emergency response that includes lessons learned from past weather emergencies to ensure necessary supplies and personnel are available through the weather emergency;

(B) A load shed annex that must include:

(i) procedures for controlled shedding of load;

(ii) priorities for restoring shed load to service; and

(iii) a procedure for maintaining an accurate registry of critical load customers, as defined under 16 TAC §25.5(22) of this title (relating to Definitions), §25.52(c)(1) and (2) of this title (relating to Reliability and Continuity of Service) and §25.497 of this title (relating to Critical Load Industrial Customers, Critical Load Public Safety Customers, Critical Care Residential Customers, and Chronic Condition Residential Customers), and TWC §13.1396 (relating to Coordination of Emergency Operations), directly served, if maintained by the entity. The registry must be updated as necessary but, at a minimum, annually. The procedure must include the processes for providing assistance to critical load customers in the event of an unplanned outage, for communicating with critical load customers during an emergency, coordinating with government and service agencies as necessary during an emergency, and for training staff with respect to serving critical load customers;

(C) A pandemic and epidemic annex;

(D) A wildfire annex;

(E) A hurricane annex that includes evacuation and re-entry procedures if facilities are located within a hurricane evacuation zone, as defined by the Texas Division of Emergency Management (TDEM);

(F) A cyber security annex;

(G) A physical security incident annex;

(H) A transmission and distribution utility that leases or operates facilities under PURA §39.918(b)(1) or procures, owns, and operates facilities under PURA §39.918(b)(2) must include an annex that details its plan for the use of those facilities; and

(I) Any additional annexes as needed or appropriate to the entity's particular circumstances.

(2) An electric cooperative, an electric utility, or a municipally owned utility that operate a generation resource in Texas; and a PGC must include the following annexes for its generation resources other than generation resources authorized under PURA §39.918:

(A) A weather emergency annex that includes:

(i) operational plans for responding to a cold or hot weather emergency, distinct from the weather preparations required under §25.55 of this title;

(ii) verification of the adequacy and operability of fuel switching equipment, if installed; and

(iii) a checklist for generation resource personnel to use during a cold or hot weather emergency response that includes lessons learned from past weather emergencies to ensure necessary supplies and personnel are available through the weather emergency;

(B) A water shortage annex that addresses supply shortages of water used in the generation of electricity;

(C) A restoration of service annex that identifies plans intended to restore to service a generation resource that failed to start or that tripped offline due to a hazard or threat;

(D) A pandemic and epidemic annex;

(E) A hurricane annex that includes evacuation and re-entry procedures if facilities are located within a hurricane evacuation zone, as defined by TDEM;

(F) A cyber security annex;

(G) A physical security incident annex; and

(H) Any additional annexes as needed or appropriate to the entity's particular circumstances.

(3) A REP must include in its EOP the following annexes:

(A) A pandemic and epidemic annex;

(B) A hurricane annex that includes evacuation and re-entry procedures if facilities are located within a hurricane evacuation zone, as defined by TDEM;

(C) A cyber security annex;

(D) A physical security incident annex; and

(E) Any additional annexes as needed or appropriate to the entity's particular circumstances.

(4) ERCOT must include the following annexes:

(A) A pandemic and epidemic annex;

(B) A weather emergency annex that addresses ERCOT's plans to ensure continuous market and grid management operations during weather emergencies, such as tornadoes, wildfires, extreme cold weather, extreme hot weather, and flooding;

(C) A hurricane annex that includes evacuation and re-entry procedures if facilities are located within a hurricane evacuation zone, as defined by TDEM;

(D) A cyber security annex;

(E) A physical security incident annex; and

(F) Any additional annexes as needed or appropriate to ERCOT's particular circumstances.

(f) Drills. An entity must conduct or participate in at least one drill each calendar year to test its EOP. Following an annual drill the entity must assess the effectiveness of its emergency response and revise its EOP as needed. If the entity operates in a hurricane evacuation zone as defined by TDEM, at least one of the annual drills must include a test of its hurricane annex. An entity conducting an annual drill must, at least 30 days prior to the date of at least one drill each calendar year, notify commission staff, using the method and form prescribed by commission staff on the commission's website, and the appropriate TDEM District Coordinators, by email or other written form, of the date, time, and location of the drill. An entity that has activated its EOP in response to an emergency is not required, under this subsection, to conduct or participate in a drill in the calendar year in which the EOP was activated.

(g) Reporting requirements. Upon request by commission staff during an activation of the State Operations Center by TDEM, an affected entity must provide updates on the status of operations, outages, and restoration efforts. Updates must continue until all incident-related outages of customers able to take service are restored or unless otherwise notified by commission staff. After an emergency, commission staff may require an affected entity to provide an after action or lessons learned report and file it with the commission by a date specified by commission staff.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on February 28, 2022.

TRD-202200710

Andrea Gonzalez

Rules Coordinator

Public Utility Commission of Texas

Effective date: March 20, 2022

Proposal publication date: December 17, 2021

For further information, please call: (512) 936-7244