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Big River Steel LLC (BRS) and Entergy Arkansas, LLC (EAL) Received a Penalty of $26,974,179 in Violation of § 38.2.5(d)(ii)(e) of the MISO Tariff

Summary of NERC Penalties

REGION

WHEN?

ENTITY

COMPLIANCE AREA

VIOLATION

REASON

PENALTY AMOUNT

FERC

Quarter 3 - August 2023

Big River Steel LLC (BRS) and Entergy Arkansas, LLC (EAL)

FERC's Regulations

§38.2.5(d)(ii)(e) of the MISO Tariff

Entergy Arkansas sold energy through MISO's markets for reduced energy usage on behalf of BRS. However, BRS did not reduce energy consumption levels in response to demand response offers, violating § 38.2.5(d)(ii)(e) of the MISO Tariff.

$26,974,179

Entergy Arkansas was (as the Market Participant for BRS) selling energy, in the form of reduced energy usage, in MISO’s Day Ahead and Real Time markets. Big River Steel did not (with the exception of seven days in February 2021) reduce energy consumption levels in response to MISO accepting its demand response offers. Instead, BRS operated at the load levels at which it would have operated if it were not a DRR-1 unit. FERC Enforcement concluded that this conduct violated § 38.2.5(d)(ii)(e) of the MISO Tariff because BRS did not “respond to [MISO] directives to . . . change output levels” by reducing its load below what it would otherwise have been. Because EAL was the Market Participant for BRS’s participation as a DRR-1, Enforcement concludes that EAL is responsible for BRS’s conduct that violated the MISO Tariff. The MISO Tariff makes a Market Participant financially responsible to [MISO] for all of its Market Activities and obligations.
 

Big River Steel operates a steel mill that uses as much as 300 megawatts (MW) to operate electric arc furnaces and other equipment. The mill is in Osceola, Arkansas, within MISO’s footprint. Big River Steel’s load levels at its mill rise and fall in the normal course of business as it turns smelters and other equipment on and off.

Entergy Arkansas is a Load Serving Entity (LSE), providing distribution service to approximately 725,000 retail electric customers, primarily in Arkansas.

Entergy Arkansas served as the Market Participant for BRS’s participation as a DRR-1 unit in MISO. As a result, BRS submitted its demand response offers through EAL and received payments from MISO through EAL. Nevertheless, it was BRS that decided what offers to submit in MISO’s Day Ahead and Real Time markets and what BRS would do if its offers were accepted.

In 2016, BRS and EAL entered into a supplemental agreement to give BRS direct access to the MISO web portal. This agreement makes BRS responsible for “reducing the electric demand or load of the Facility in accordance with MISO instructions, directions, or other notifications and the MISO Rules, including MISO instructions, directions, and other notifications communicated through the MISO Portal.”

Big River Steel participated in MISO as a DRR-1 unit throughout the Relevant Period. With the exception of a seven-day period during Winter Storm Uri (Feb. 16-22, 2021), BRS did not change mill operations to alter energy consumption levels when MISO accepted its demand response offers. Instead, BRS operated its mill at the same load levels as it would have if it had not been a DRR-1 unit.

About Certrec:
Certrec is a leading provider of regulatory compliance solutions for the energy industry with the mission of helping ensure a stable, reliable, bulk electric supply. Since 1988, Certrec’s SaaS applications and consulting expertise have helped hundreds of power-generating facilities manage their regulatory compliance and reduce their risks.

Certrec’s engineers and business teams bring a cumulative 1,500 years of working experience in regulatory areas of compliance, engineering, and operations, including nuclear, fossil, solar, wind facilities, and other Registered Entities generation and transmission.

Certrec has helped more than 120 generating facilities establish and maintain NERC Compliance Programs. We manage the entire NERC compliance program for 60+ registered entities in the US and Canada that trust us to decrease their regulatory and reputational risk. Certrec is ISO/IEC 27001:2013 certified and has successfully completed annual SOC 2 Type 2 examinations.

For press and media inquiries, please contact marketing@certrec.com.

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