ACCEPTED 15-24-00118-CV FIFTEENTH COURT OF APPEALS No. 15-24-00118-CV AUSTIN, TEXAS 3/27/2025 4:13 PM CHRISTOPHER A. PRINE CLERK COURT OF APPEALS FOR THE RECEIVED IN FIFTEENTH DISTRICT OF TEXAS 15th COURT OF APPEALS AUSTIN, TEXAS AUSTIN, TEXAS 3/27/2025 4:13:55 PM CHRISTOPHER A. PRINE Clerk ASPIRE POWER VENTURES, LP,
Appellant,
v.
PUBLIC UTILITY COMMISSION OF TEXAS, ELECTRIC RELIABILITY COUNCIL OF TEXAS, THOMAS GLEESON, LORI COBOS, JIMMY GLOTFELTY, KATHLEEN JACKSON, AND COURTNEY HJALTMAN,
Appellees.
On Appeal from the 345th Judicial District Court Travis County, Texas Cause No. D-1-GN-24-003384 Hon. Catherine A. Mauzy, Presiding
BRIEF OF AMICUS CURIAE CALPINE CORPORATION
Patrick Leahy Macey Reasoner Stokes State Bar No. 24092674 State Bar No. 00788253 BAKER BOTTS L.L.P. George Fibbe 401 South 1st Street, Suite 1300 State Bar No. 24036559 Austin, Texas 78704 J. Mark Little (512) 322-2500 State Bar No. 24078869 (512) 322-2501 (Facsimile) BAKER BOTTS L.L.P. patrick.leahy@bakerbotts.com 910 Louisiana Street Houston, Texas 77002 (713) 229-1234 (713) 229-1522 (Facsimile) macey.stokes@bakerbotts.com george.fibbe@bakerbotts.com mark.little@bakerbotts.com
COUNSEL FOR AMICUS CURIAE CALPINE CORPORATION TABLE OF CONTENTS
Page
Table of Authorities .................................................................................................. ii Interest of Amicus Curiae ..........................................................................................1 Argument....................................................................................................................1 I. Aspire’s procedural and substantive attacks on ERCOT Contingency Reserve Service are without merit. ..................................1 A. ERCOT validly promulgated the ECRS Rules through its Nodal Protocol Revision Process. ...............................................2 B. ECRS is a valid reliability tool that is consistent with PURA. .........................................................................................5 II. Aspire might try to use this case to obtain retroactive resettlement of ECRS transactions, to the detriment of the ERCOT market. .....................................................................................7 Prayer .........................................................................................................................9 Certificate of Compliance ........................................................................................11
i TABLE OF AUTHORITIES
Page(s) CASES
CPS Energy v. Elec. Reliability Council of Tex., 671 S.W.3d 605 (Tex. 2023) ............................................................................ 3, 4
Oncor Elec. Delivery Co. v. Chaparral Energy, LLC, 546 S.W.3d 133 (Tex. 2018) ................................................................................ 4
Pub. Util. Comm’n v. Constellation Energy Commodities Grp., Inc., 351 S.W.3d 588 (Tex. App.—Austin 2011, pet. denied) ..................................... 4
Pub. Util. Comm’n of Tex. v. Luminant Energy Company, 691 S.W.3d 448 (Tex. 2024) ............................................................................ 5, 6
Pub. Util. Comm’n of Tex. v. RWE Renewables, 691 S.W.3d 484 (Tex. 2024) ................................................................2, 3, 4, 6, 7
Sanchez v. Huntsville Indep. Sch. Dist., 844 S.W.2d 286 (Tex. App.—Houston [1st Dist.] 1992, no writ) ....................... 3
STATUTES
TEX. GOV’T CODE § 2001.001.................................................................................... 2
TEX. GOV’T CODE § 2001.003(7) ............................................................................... 3
TEX. UTIL. CODE § 39.151(a)(2) ................................................................................ 5
RULES AND PROTOCOLS 16 TEX. ADMIN. CODE § 25.509 ................................................................................. 7
ERCOT Protocol § 4.4.11 .......................................................................................... 7
ERCOT Protocol § 6.5.7.3 ......................................................................................... 7
TEX. R. APP. P. 11 ...................................................................................................... 1
ii OTHER AUTHORITIES
ERCOT, ERCOT Organization Backgrounder, https://www.ercot.com/news/mediakit/backgrounder .......................................... 3 ERCOT, Fact Sheet, https://www.ercot.com/files/docs/2022/02/08/ERCOT_Fact_Sheet.pdf (March 2025) ..................................................................................................................... 3
iii INTEREST OF AMICUS CURIAE
This brief is filed by Calpine Corporation (“Calpine”) as amicus curiae1 to
present an additional market-participant perspective to assist the Court. Calpine,
through its subsidiaries, is one of the nation’s largest generators of electricity from
natural gas and geothermal resources, with robust commercial, industrial, and
residential retail operations in key competitive power markets. It is based in Houston
and has extensive operations in Texas and the Electric Reliability Council of Texas
(“ERCOT”) market. As a substantial participant in the ERCOT market, Calpine is
interested in the market’s predictable and efficient functioning. Calpine operates its
business in reliance on ERCOT Protocols and would be significantly harmed if these
Protocols were invalidated, many more Protocols were placed in legal jeopardy, and
other market participants could retroactively resettle completed transactions such as
these.
ARGUMENT
I. Aspire’s procedural and substantive attacks on ERCOT Contingency Reserve Service are without merit. On the merits, Aspire assaults the ERCOT Contingency Reserve Service
(“ECRS”) on both procedural and substantive grounds. If successful, those
1 Calpine Corporation paid all fees for the preparation of this amicus curiae brief. See TEX. R. APP. P. 11.
1 arguments would take down not only ECRS, but virtually all of ERCOT’s Protocols.
Fortunately, however, none of Aspire’s aggressive attacks has merit.
A. ERCOT validly promulgated the ECRS Rules through its Nodal Protocol Revision Process.
Procedurally, Aspire argues that ERCOT violated the Administrative
Procedure Act (“APA”) by adopting the ECRS Rules. Aspire Br. 58-59. But that
argument fails because the APA does not govern the ERCOT Protocol process.
Rather, as with all its Protocols, ERCOT adopted the ECRS Rules using a non-APA
process endorsed by the Texas Supreme Court in Public Utility Commission of Texas
v. RWE Renewables, 691 S.W.3d 484 (Tex. 2024):
While the PUC has broad administrative responsibilities, it simultaneously lacks ‘the expertise and staff resources’ to make informed regulatory decisions independent of ERCOT.... The legislative and regulatory schemes have in turn envisioned separate, complementary purposes of and procedures for PUC rules and ERCOT protocols. Id. at 490-91 (internal citations omitted). Thus, ERCOT’s authority to govern the
market through its Protocol process is not simply derived from the PUC’s authority
but is an essential feature of the regulatory structure established by the Legislature.
Aspire is very familiar with RWE’s controlling precedent since Aspire was an amicus
curiae supporting the opposite result in that case.2
2 The APA does not apply for an additional reason: ERCOT is not a “state agency.” The APA’s requirements apply only to a “state agency,” TEX. GOV’T CODE § 2001.001, defined as “a state
2 The RWE Court explained that “PURA envisions a separate process for
ERCOT-adopted protocols” in lieu of the APA pathway for rulemaking. Id. at 486.
Specifically, ERCOT uses the Nodal Protocol Revision Request (“NPRR”) process
because the Legislature “statutorily authorized [ERCOT] to establish, adopt, and
enforce a variety of policies, rules, guidelines, standards, procedures, protocols, and
other requirements to govern the operations of [electric] market participants.” CPS
Energy v. Elec. Reliability Council of Tex., 671 S.W.3d 605, 626 (Tex. 2023).
There is no shortage of process in the NPRR process. It is a “painstaking
procedure” that “serves to leverage the expertise of ERCOT members and industry
stakeholders while maintaining transparency and affording interested parties
plentiful opportunities to weigh in.” RWE, 691 S.W.3d at 490. “A market
participant, among others, may appeal a decision of the ERCOT board regarding an
officer, board, commission, or department with statewide jurisdiction that makes rules or determines contested cases.” Id. § 2001.003(7) (emphasis added). ERCOT does not have statewide jurisdiction. It has regulatory authority over a large portion of Texas, but not all of it: El Paso, portions of the Panhandle (including Amarillo), and portions of East Texas (including Beaumont) lie outside ERCOT’s jurisdiction. See CPS Energy v. Elec. Reliability Council of Tex., 671 S.W.3d 605, 611 (Tex. 2023) (“Most of the state comprises the U.S. mainland’s only intrastate electrical grid, which covers 75 percent of the state’s acreage, carries about 90 percent of its electrical load, and includes more than 52,700 miles of transmission lines, 1,100 generation units, and 26 million electricity customers.”) (footnote omitted); ERCOT, ERCOT Organization Backgrounder, https://www.ercot.com/news/mediakit/backgrounder (last visited March 27, 2025); ERCOT, Fact Sheet, https://www.ercot.com/files/docs/2022/02/08/ERCOT_Fact_Sheet.pdf (March 2025). Governmental entities that lack statewide jurisdiction are not subject to the APA. See, e.g., Sanchez v. Huntsville Indep. Sch. Dist., 844 S.W.2d 286, 289 (Tex. App.—Houston [1st Dist.] 1992, no writ) (“School districts are not covered by the provisions of the Administrative Procedure and Texas Register Act because they are not ‘agencies’ as defined by the statute.”) (construing substantially similar predecessor version of APA) (internal citation omitted).
3 NPRR to the PUC,” and “if the complainant is dissatisfied with the result of the PUC
proceedings, it can then seek judicial review.” Id. Indeed, the Texas Supreme Court
has held that the Legislature granted the PUC exclusive jurisdiction over claims
regarding ERCOT’s actions. CPS Energy, 671 S.W.3d at 617. The Court reasoned
that PURA created a “‘pervasive regulatory scheme’ that impliedly ‘indicate[d] that
the Legislature intended for the regulatory process to be the exclusive means of
remedying the problem to which the regulation is addressed.’” Id. (quoting Oncor
Elec. Delivery Co. v. Chaparral Energy, LLC, 546 S.W.3d 133, 138 (Tex. 2018)).
Aspire made the deliberate choice not to take advantage of these procedural rights.
Importantly, Aspire’s procedural challenge to the ECRS Rules, if successful,
would imperil all other ERCOT Protocols as well, because they too were
promulgated without APA rulemaking. That result would throw the entire ERCOT
market into disarray, as the ERCOT Protocols are the highly technical, highly
comprehensive bedrock of the ERCOT system. See RWE, 691 S.W.3d at 486 (“The
‘Nodal Protocols’ developed and implemented by ERCOT ‘provide the framework
for the administration of the Texas electricity market.’” (quoting Pub. Util. Comm’n
v. Constellation Energy Commodities Grp., Inc., 351 S.W.3d 588, 594–95 (Tex.
App.—Austin 2011, pet. denied))). It is difficult to overstate the chaos that would
follow in the wake of such a ruling. Fortunately, however, the Court can avoid all
those ills by confirming what the Texas Supreme Court has already held—that
4 ERCOT Protocols do not require APA rulemaking and can instead be promulgated
via the NPRR process.
B. ECRS is a valid reliability tool that is consistent with PURA.
Substantively, Aspire claims that ECRS is inconsistent with the Public Utility
Regulatory Act (“PURA”) because it limits competition and manipulates the market.
Aspire Br. 62-64. But the Texas Supreme Court rejected virtually the same argument
just last year in Public Utility Commission of Texas v. Luminant Energy Company,
691 S.W.3d 448 (Tex. 2024). There, the claim was that emergency pricing orders
issued by the PUC during Winter Storm Uri to preserve the reliability of the ERCOT
grid unlawfully restricted the competitive pricing of power, in contravention of
PURA. Id. at 461. The Luminant Court disagreed, explaining that ERCOT is
statutorily charged with “ensuring the adequacy of reliability of the electric grid.”
Id. at 454; see also TEX. UTIL. CODE § 39.151(a)(2) (directing Independent System
Operator (ERCOT) to “ensure the reliability and adequacy of the regional electrical
network”); id. § 39.151(d) (“The commission shall adopt and enforce rules relating
to the reliability of the regional electrical network . . . or may delegate those
responsibilities to an independent organization.”). Accordingly, PURA
“acknowledges that the goal of prices set by competition may, in some
circumstances, have to yield” to the fundamental goal of grid reliability. Luminant,
5 691 S.W.3d at 463. “Deciding when those circumstances are present—and how to
respond—is the Commission’s job, not the judiciary’s.” Id.
Aspire cannot maintain its claims in the face of Luminant’s clear and on-point
holding. As detailed in ERCOT’s brief, ECRS, like the orders at issue in Luminant,
is an important tool for ensuring grid reliability. See ERCOT Br. 54-56. Aspire may
disagree with the ECRS program as a matter of policy or regret the financial losses
it has incurred as a result, but neither makes ECRS somehow inconsistent with
PURA—which, after all, explicitly charges the PUC with ensuring the reliability of
the grid.
As with its procedural challenge, Aspire’s substantive challenge comes with
vast harmful implications for the ERCOT market. ECRS is hardly the only program
that touches on or even intrudes on unfettered competition for the sake of reliability.
There are a whole host of programs under which ERCOT limits or adjusts prices, as
authorized by the PUC, in order to ensure reliability or otherwise fulfill its mandate.
See RWE, 691 S.W.3d at 487 (stating that “ERCOT is uniquely positioned to manage
the electricity market by virtue of its technical expertise, and ERCOT utilizes a
variety of resources and systems to manage grid conditions,” including price-related
mechanisms such as scarcity pricing (citing Luminant, 691 S.W.3d at 454)). For
example, ERCOT imposes price adders on top of the market-clearing price of power
during periods of energy scarcity, in order to encourage additional generation
6 resources to enter the market and provide much-needed power. See, e.g., ERCOT
Protocol 6.5.7.3. And when demand for power is so high and available generation
so low that load must be shed—meaning customers’ power is turned off—the
ERCOT Protocols automatically raise the price to the regulatory price cap. Id.; 16
TEX. ADMIN. CODE § 25.509. The PUC and ERCOT have adopted system-wide
offer caps, which currently limit the price of power during most periods to $5,000
per megawatt-hour. ERCOT Protocol 4.4.11. None of these provisions—or the
multitude of other similar intrusions on competition for the sake of reliability—
would be permitted if ERCOT were prohibited from regulating competition in
service to reliability goals. That untenable result further refutes Aspire’s arguments.
II. Aspire might try to use this case to obtain retroactive resettlement of ECRS transactions, to the detriment of the ERCOT market.
This case appears to be the first step in Aspire’s attempt to seek retroactive
resettlement of ECRS transactions and recover from the rest of the market the
substantial sums it lost therein. Aspire lost money because it did not effectively
adapt its hedging and trading practices to account for the new ECRS program. In its
Second Amended Petition, Aspire claimed that the ECRS rules made it “impossible
for independent QSEs [Qualified Scheduling Entities] like Aspire to efficiently
manage the risks that are inherent in fixed-price bilateral contracts.” App’x 281.
Aspire went to on to protest that it “cannot predict the abrupt addition and removal
of generation under ECRS,” which “makes it much harder” for Aspire “to offer
7 fixed-price hedges to retail providers” and “substantially increases the price for these
hedges.” Id. In other words, the ECRS Rules disrupted Aspire’s business model,
and Aspire’s inability to adapt to the new regulatory environment caused it to suffer
significant losses.
Aspire has represented that it is not seeking any monetary relief here, but it
might attempt to use a favorable ruling in this litigation to do just that. It has
carefully left open the door to recovering “damages or other monetary relief because
of the harms it suffered because of ECRS,” id. at 293, and pointedly “disagree[d]
with the PUC’s position that prior transactions cannot be unwound,” id. at 272. If
Aspire succeeds in invalidating the ECRS rules, it could attempt to parlay that ruling
into an unwinding of settled ECRS transactions on which it lost money. Specifically,
Aspire might use any such declaratory judgment as the basis for an administrative
challenge before the PUC, arguing that because the ECRS rules were invalidly
adopted, the transactions made pursuant to the ECRS program were unlawful and
must be reversed.
That ultimate aim—the unwinding of completed ECRS transactions—might
benefit Aspire, but only at the unacceptably high cost of upsetting other market
participants’ settled expectations and undermining trust in both the ECRS program
and the ERCOT system as a whole. When undertaking ECRS transactions, market
participants often engage in related conduct, such as hedging, that lies beyond the
8 jurisdiction of the PUC. Because the PUC cannot unwind those aspects of completed
ECRS transactions, the unwinding that Aspire seeks would concern only a partial,
distorted piece of the greater whole. That would merely shift money from those,
like Calpine, who were able to better adapt to the ECRS rules to those, like Aspire,
who were not. And even more importantly, it would signal to all market participants
and potential investors that there is no certainty or stability in ERCOT market
transactions—which is exactly the wrong message to send when the State is seeking
to attract new investment in the grid. That path is both legally unsound and
prudentially unwise.
PRAYER Calpine respectfully requests the Court to affirm the district court’s judgment.
9 Dated: March 27, 2025 Respectfully submitted,
BAKER BOTTS L.L.P.
By: /s/ Macey Reasoner Stokes Macey Reasoner Stokes State Bar No. 00788253 George Fibbe State Bar No. 24036559 J. Mark Little State Bar No. 24078869 910 Louisiana Street Houston, Texas 77002 (713) 229-1234 (713) 229-1522 (Facsimile) macey.stokes@bakerbotts.com george.fibbe@bakerbotts.com mark.little@bakerbotts.com
Patrick Leahy State Bar No. 24092674 401 South 1st Street, Suite 1300 Austin, Texas 78704 (512) 322-2500 (512) 322-2501 (Facsimile) patrick.leahy@bakerbotts.com
COUNSEL FOR AMICUS CURIAE CALPINE CORPORATION
10 CERTIFICATE OF COMPLIANCE
As required by Texas Rule of Appellate Procedure 9.4(i), I certify that, according to the word count of the computer program used to prepare this brief, the document contains 2,110 words.
/s/ Macey Reasoner Stokes Macey Reasoner Stokes
11 Automated Certificate of eService This automated certificate of service was created by the efiling system. The filer served this document via email generated by the efiling system on the date and to the persons listed below. The rules governing certificates of service have not changed. Filers must still provide a certificate of service that complies with all applicable rules.
Janet Guillory on behalf of Macey Stokes Bar No. 788253 janet.guillory@bakerbotts.com Envelope ID: 98985631 Filing Code Description: Other Brief Filing Description: Brief of Amicus Curiae Calpine Corporation Status as of 3/27/2025 4:22 PM CST
Case Contacts
Name BarNumber Email TimestampSubmitted Status
David Laurent david.laurent@oag.texas.gov 3/27/2025 4:13:55 PM SENT
Laura Courtney laura.courtney@oag.texas.gov 3/27/2025 4:13:55 PM SENT
James ScottMcCarley scott.mccarley@oag.texas.gov 3/27/2025 4:13:55 PM SENT
Macey Stokes macey.stokes@bakerbotts.com 3/27/2025 4:13:55 PM SENT
George Fibbe george.fibbe@bakerbotts.com 3/27/2025 4:13:55 PM SENT
Mark Little mark.little@bakerbotts.com 3/27/2025 4:13:55 PM SENT
Patrick Leahy patrick.leahy@bakerbotts.com 3/27/2025 4:13:55 PM SENT
Associated Case Party: Aspire Power Ventures, LP
Name BarNumber Email TimestampSubmitted Status
Chrysta L.Castaneda chrysta@castaneda-firm.com 3/27/2025 4:13:55 PM SENT
Nicole Michael nicole@castaneda-firm.com 3/27/2025 4:13:55 PM SENT
Brent M.Rubin brubin@ccsb.com 3/27/2025 4:13:55 PM SENT
Ken Carroll kcarroll@ccsb.com 3/27/2025 4:13:55 PM SENT
Monica Latin mlatin@ccsb.com 3/27/2025 4:13:55 PM SENT
Associated Case Party: Electric Reliability Council of Texas
Name BarNumber Email TimestampSubmitted Status
Elliot Clark eclark@winstead.com 3/27/2025 4:13:55 PM SENT
Elliot Clark eclark@winstead.com 3/27/2025 4:13:55 PM SENT
Elin Isenhower eisenhower@winstead.com 3/27/2025 4:13:55 PM SENT Automated Certificate of eService This automated certificate of service was created by the efiling system. The filer served this document via email generated by the efiling system on the date and to the persons listed below. The rules governing certificates of service have not changed. Filers must still provide a certificate of service that complies with all applicable rules.
Janet Guillory on behalf of Macey Stokes Bar No. 788253 janet.guillory@bakerbotts.com Envelope ID: 98985631 Filing Code Description: Other Brief Filing Description: Brief of Amicus Curiae Calpine Corporation Status as of 3/27/2025 4:22 PM CST
Associated Case Party: Electric Reliability Council of Texas
Elin Isenhower eisenhower@winstead.com 3/27/2025 4:13:55 PM SENT
Elin Isenhower eisenhower@winstead.com 3/27/2025 4:13:55 PM SENT
Associated Case Party: Public Utility Commission of Texas
Name BarNumber Email TimestampSubmitted Status
John Hulme John.Hulme@oag.texas.gov 3/27/2025 4:13:55 PM SENT
Amanda AtkinsonCagle Amanda.Cagle@oag.texas.gov 3/27/2025 4:13:55 PM SENT
Jordan Pratt Jordan.Pratt@oag.texas.gov 3/27/2025 4:13:55 PM SENT