ADMINISTRATIVE PENALTY, DISGORGEMENT ORDER, OR MITIGATION PLAN.

(a) The commission may impose an administrative penalty against a person regulated under this title who violates this title or a rule or order adopted under this title.

(b) The penalty for a violation may be in an amount not to exceed $25,000. Each day a violation continues or occurs is a separate violation for purposes of imposing a penalty.

(b-1) Notwithstanding Subsection (b), the penalty for a violation of a voluntary mitigation plan entered into under Subsection (f) or of a provision of Section 35.0021 or 38.075 may be in an amount not to exceed $1,000,000 for a violation. Each day a violation continues or occurs is a separate violation for purposes of imposing a penalty.

(b-2) Notwithstanding Subsection (b), the penalty for a violation of Section 39.360 in which a business entity fails to submit all required information to or knowingly submits false information to an independent organization certified under Section 39.151 may be in an amount not to exceed $1 million for each violation.

(c) The commission by rule shall establish a classification system for violations that includes a range of administrative penalties that may be assessed for each class of violation based on:

(1) the seriousness of the violation, including:

(A) the nature, circumstances, extent, and gravity of a prohibited act; and

(B) the hazard or potential hazard created to the health, safety, or economic welfare of the public;

(2) the economic harm to property or the environment caused by the violation;

(3) the history of previous violations;

(4) the amount necessary to deter future violations;

(5) efforts to correct the violation; and

(6) any other matter that justice may require.

(d) The classification system established under Subsection (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.

(e) For a violation of Section 39.157, the commission shall, in addition to the assessment of a penalty, order disgorgement of all excess revenue resulting from the violation. For any other violation of the statutes, rules, or protocols relating to wholesale electric markets, the commission may, in addition to the assessment of a penalty, order disgorgement of all excess revenue resulting from the violation.

(f) The commission and a person may develop and enter into a voluntary mitigation plan relating to a violation of Section 39.157 or rules adopted by the commission under that section. The commission may approve the plan only if the commission determines that the plan is in the public interest. The voluntary mitigation plan must be reviewed at least once every two years and not later than the 90th day after the implementation date of a wholesale market design change. As part of the review, the commission must determine whether the voluntary mitigation plan remains in the public interest. If the commission determines that the voluntary mitigation plan is no longer in the public interest, the commission and the person must agree to a modification of the plan or the commission must terminate the plan. Adherence to the plan must be considered in determining whether a violation occurred and, if so, the penalty to be assessed.

(g) In this subchapter, "excess revenue" means revenue in excess of revenue that would have occurred absent a violation.