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Entergy Arkansas (EAL) Receives a $52,000 Penalty in Violation of Section 40.2.5.e of the MISO Tariff and Sections 35.41(a) and 35.41(b) of the Commission’s regulations

Summary of NERC Penalties

REGION

WHEN?

ENTITY

COMPLIANCE AREA

VIOLATION

REASON

PENALTY AMOUNT

FERC

Quarter 3 - July 2023

Entergy Arkansas (EAL)

MISO Tariff and FERC's regulations

Section 40.2.5.e of the MISO Tariff and Sections 35.41(a) and 35.41(b) of the Commission’s regulations

EAL violated Tariff Section 40.2.5.e by submitting EcoMin and EcoMax values that restricted MISO’s ability to dispatch Hot Springs above or below a certain MW level, while at the same time maintaining a control mode reflecting that the facility was available for dispatch by MISO

$52,000

FERC Enforcement determined that EAL violated Section 40.2.5.e of the MISO Tariff and Sections 35.41(a) and 35.41(b) of the Commission’s regulations. MISO Tariff Section 40.2.5.e provides that, “the values in Offers representing the non-price information shall reflect the actual known physical capabilities and characteristics of the Generation Resources. . . .” Enforcement determined that during the Relevant Period, EAL violated Tariff Section 40.2.5.e by submitting EcoMin and EcoMax values that restricted MISO’s ability to dispatch Hot Springs above or below a certain MW level, while at the same time maintaining a control mode reflecting that the facility was available for dispatch by MISO. Section35.41(a) of the Commission’s regulations provides that, “where a Seller participates in a Commission-approved organized market, Seller must operate and schedule generating facilities, undertake maintenance, declare outages, and commit or otherwise bid supply in a manner that complies with the Commission-approved rules and regulations of the applicable market.” Enforcement determined that EAL is a “Seller” subject to Section 35.41(a) and that EAL’s submission of erroneous Real-Time offers for Hot Springs during the Relevant Period that did not reflect its true operational mode violated Section 35.41(a). Section35.41(b) of the Commission’s regulations requires that a Seller, “provide accurate and factual information and not submit false or misleading information, or omit material information in any communication with Commission-approved independent system operators.” Enforcement determined that EAL violated Section 35.41(b) by submitting inaccurate offers to MISO during the Relevant Period, representing that Hot Springs would respond to MISO dispatch instructions when it would not. Entergy Arkansas (EAL) dispatchers responsible for making energy market offers for the Hot Springs facility were relying on certain internal guidelines with respect to the operation of the Hot Springs facility while in duct-firing mode (the DFR Guidelines). The DFR Guidelines recommended that Hot Springs operate in duct-firing for a minimum duration of two hours, and when Hot Springs exited duct-firing, that it remain out of duct-firing for a minimum of one to two hours. The DFR Guidelines also recommended that, once duct-firing was initiated, Hot Springs should operate at the top of the duct-firing range (i.e., approximately 605 MW). Hot Springs’ dispatchers set the control mode of resources, which is communicated contemporaneously to MISO. There are four control modes, two of which require resources to respond to MISO’s dispatch instructions. During the Relevant Period, Hot Springs’ Real-Time offers communicated that it was in a control mode that would respond to MISO’s dispatch instructions. However, during certain hours in the Relevant Period when the unit was in duct-firing range or dispatched into or out of the duct-firing range, Hot Springs did not follow MISO’s dispatch instructions in a timely manner. During the hours in question, dispatchers did not adjust its Real-Time offers to submit accurate offers, but rather disregarded MISO’s dispatch instructions or at times raised Hot Springs’ Economic Minimums (EcoMin) or lowered Economic Maximums (EcoMax) in order to “block” or “pin” the unit (i.e., to restrict MISO’s ability to dispatch the unit). EAL, a subsidiary of Entergy Corporation (Entergy), generates and distributes electric power to more than 700,000 customers in Arkansas. EAL agreed to pay a civil penalty of $52,000 to the United States Treasury, and to be subject to compliance monitoring.

EAL’s Hot Springs facility is a combined cycle gas turbine with an installed capacity of approximately 605 MW located in Malvern, Arkansas. Hot Springs has supplemental duct-firing capability (duct-firing), which increases the heat energy in the combined cycle process when the duct burners are lit or fired. The increase in the heat energy from the duct-firing increases the output of the facility’s Heat Recovery Steam Generator, which increases Hot Springs’ overall output of electricity. When operating the gas turbines without firing the duct burners, Hot Springs’ maximum output is between approximately 465 MW and 495 MW; when supplemental duct-firing is engaged the maximum output is between approximately 565 MW and 605 MW.

Penalty Determination

Enforcement considered the factors described in the Revised Policy Statement on Penalty Guidelines, including the fact that EAL cooperated with Enforcement during the investigation.

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