NERC Case Notes: Reliability Standard COM-001-1 | White & Case LLP International Law Firm, Global Law Practice
NERC Case Notes: Reliability Standard COM-001-1

NERC Case Notes: Reliability Standard COM-001-1

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This page contains the NOP (Notice of Penalty) and ACP (Administrative Citation of Penalty) summaries. Click here to read the FFT (Find, Fix and Track) summaries.

Arlington Valley, LLC - AVBA, FERC Docket No. NP13-9 (December 31, 2012)

Reliability Standard: COM-001-1

Requirement: 1, 2, 3, 5

Violation Risk Factor: High (1), Medium (2), Lower (3, 5)

Violation Severity Level: Severe (1, 2, 3, 5)

Region: WECC

Issue: Arlington Valley, LLC – AVBA (Arlington Valley) self-reported, as a TOP, that it had not verified with its Reliability Coordinator, as required, the adequacy and reliability of its telecommunications facilities used for sending Arlington Valley's operating information to its Reliability Coordinator (1). Arlington Valley also self-reported that it had not properly managed, alarmed, tested and monitored its telecommunication facilities as required (2) and that it was unable to verify that it was able to coordinate telecommunications among adjoining areas, such as to identify and to recommend solutions for area-wide telecommunication problems (3). In addition, Arlington Valley self-reported that it did not have adequate written operating instructions and procedures designed to ensure the continued operation of the system in the event of the loss of telecommunication facilities (5).

Finding: WECC found that the COM-001-1 R1, R2, R3 and R5 violations only constituted a minimal risk to BPS reliability. In terms of the COM-001-1 violations, Constellation Energy Control and Dispatch (CECD), in its role as Arlington Valley's BA Service Agent, was managing, in part, Arlington Valley's telecommunications facilities. In addition, neither the Reliability Coordinator nor the neighboring TOP had alerted Arlington Valley to any reliability concerns during the course of the violations. The durations of the COM-001-1 violations were from November 5, 2007 through June 17, 2008 (1) and from November 5, 2007 through March 1, 2009 (2, 3 and 5). Arlington Valley stipulated to the violations. In approving the settlement agreement, the NERC BOTCC considered the fact that these violations were Arlington Valley's first violations of the relevant Reliability Standards; the violations were not intentional and were promptly mitigated once discovered; and Arlington Valley was cooperative during the enforcement process and did not conceal the violations. In addition, all but one of Arlington Valley's violations did not constitute a serious or substantial risk to BPS reliability.

Penalty: $60,000 (aggregate for 43 violations)

FERC Order: Issued January 30, 2013 (no further review)

Colorado Springs Utilities, FERC Docket No. NP10-2-000 (October 14, 2009)

Reliability Standard: COM-001-1

Requirement: R2

Violation Risk Factor: Medium

Violation Severity Level: No Serious or Substantial Risk to Bulk Power System Reliability

Region: WECC

Issue: In June 2007, Colorado Springs Utilities self-reported that it did not possess the required documentation showing that it was managing, alarming, testing, and monitoring its vital telecommunications facilities.

Finding: WECC found that this violation did not involve a serious or substantial risk to bulk power system reliability since Colorado Springs Utilities was actually performing all of those activities (even though it did not have the necessary documentation). Colorado Springs Utilities self-reported the violation and this was Colorado Springs Utilities' first violation of this Reliability Standard. And although the violation initially occurred and was reported before the Reliability Standards became mandatory on June 18, 2007, Colorado Springs Utilities did not complete its Mitigation Plan by then, and thereby this violation also resulted in a post-June 18 violation. Even though Colorado Springs Utilities completed its mitigation plan late, no penalty was imposed.

Penalty: $0

FERC Order: Issued November 13, 2009 (no further review)

Eugene Water & Electric Board (EWEB), Docket No. NP12-22-000 (March 30, 2012)

Reliability Standard: COM-001-1

Requirement: R1, R2, R3, R5

Violation Risk Factor: High (R1); Medium (R2); Lower (R3, R5)

Violation Severity Level: Severe (all)

Region: WECC

Issue: EWEB registered as a TOP with NERC effective as of May 8, 2009, and subsequently, EWEB submitted self-reports addressing non-compliance with NERC Reliability Standards. EWEB is located in the Bonneville Power Administration (BPA) Control Area. Prior to May 8, BPA was registered with NERC as the area TOP, and BPA had informed EWEB that it was not required to register as a TOP with NERC; however, after review of a FERC order discussing TOP compliance, on April 6, 2009, BPA notified EWEB that it would no longer serve as its TOP. EWEB then registered as a TOP and reported itself as non-compliant with applicable NERC Reliability Standards.

Starting on May 8, 2009, the date EWEB registered as a TOP with NERC, EWEB was in violation of R1, R2, R3 and R5 of COM-001-1. Regarding R1, EWEB did not have sufficient and reliable telecommunications facilities for the exchange of Interconnection and operating information. Regarding R2, EWEB was not managing, alarming, testing and/or actively monitoring critical telecommunications facilities in violation of the R2 requirements. Regarding R3, EWEB had no established telecommunications protocols for researching and recommending solutions to telecommunications problems among its area and the areas of other RCs, TOPs and BAs. Regarding R5, EWEB did not have documented operating instructions and procedures to allow continued system operation in the event of the loss of telecommunications facilities.

Finding: The violations posed no serious or substantial risk to BPS reliability. WECC considered that EWEB was new to the TOP role because of a registration issue. During the period of time EWEB was developing its documentation, procedures and instructions, BPS risk was mitigated as the voice and data lines between the RC and BPA were compliant with the Standard and were in place and operating. BPA had installed the lines, and as the previous TOP was responsible for the communication facilities and functions. As the BA for EWEB, BPA was responsible for system reliability within its footprint. While EWEB was working towards TOP certification, BPA performed TOP duties such as coordinating outage plans, day-to-day routine real-time communications and notifications and any unplanned work forced by equipment failures, storms, etc. BPA assured the RC it would continue to communicate any planned and emergency outages and would work diligently with EWEB to obtain full TOP certification. At the time EWEB registered as a TOP, it was working on compliance with its other functions as Transmission Owner (TO), Transmission Provider (TP), Purchasing-Selling Entity (PSE), Load Serving Entity (LSE), Distribution Provider (DP), Generator Owner (GO) and Generator Operator (GOP).

WECC assessed no penalty due to the circumstances surrounding the non compliance. BPA unexpectedly notified EWEB that it would not be its TOP, effective immediately on April 6, 2009. EWEB then found itself immediately required to be NERC compliant. EWEB submitted its self reports in a timely manner and in addition submitted mitigation plans which were timely completed. The violations were not repeat violations and were not contested by EWEB.

Penalty: $0

FERC Order: Issued April 30, 2012 (no further review)

Farmington Electric Utility System, FERC Docket No. NP10-40-000 (February 1, 2010)

Reliability Standard: COM-001-1

Requirement: R3, R5

Violation Risk Factor: Lower

Violation Severity Level: Not provided

Region: WECC

Issue: Farmington Electric Utility System ("FEUS") could not provide evidence that it had the ability to investigate and recommend solutions to telecommunications problems within its own area and other areas, nor that it had procedures in place that confirm it would be able to continue operation of the system during a loss of telecommunications facilities, though FEUS had an informal practice in place. Duration of the violation was from June 18, 2007 when the standard became enforceable through June 2, 2008.

Finding: Penalty was deemed appropriate because these were FEUS' first violations of the applicable standards, FEUS self-reported eleven of the violations, and FEUS is a small generation and transmission system that had made a substantial commitment of financial and personnel resources to NERC compliance relative to its size.

Penalty: $40,250 (aggregate for multiple violations)

FERC Order: Issued March 3, 2010 (no further review)

Mesquite Power LLC, FERC Docket No. NP12-35 (June 29, 2012)

Reliability Standard: COM-001-1

Requirement: R3, R5

Violation Risk Factor: Lower (R3, R5)

Violation Severity Level: Severe (R3, R5)

Region: WECC

Issue: In March 2009, Mesquite Power LLC (Mesquite), as a TOP, self-certified that it did not have a formal means to directly coordinate communications with its adjacent TOP and BA as required. In addition, Mesquite’s communications with its RC were coordinated through Salt River Agricultural Improvement and Power District, which is Mesquite’s BA, and Mesquite did not have a means to directly coordinate its telecommunications with its RC. (R3) Mesquite also self-certified, as a TOP, that it did not have written operating instructions and procedures, as required, for the continued operation of its system during the loss of telecommunication facilities. (R5)

Finding: WECC found that the COM-001-1 violations only constituted a minimal risk to BPS reliability since Mesquite’s BA was coordinating telecommunications for Mesquite during the violations. The duration of the COM-001-1 violations was from November 5, 2007 through May 27, 2009. In approving the settlement agreement, the NERC BOTCC considered the fact that these were Mesquite’s first violations of the relevant Reliability Standard; one of the violations (VAR-002-1 R3) was self-reported; Mesquite was cooperative during the enforcement process and did not conceal the violations; Mesquite did have a compliance program in place (which was evaluated as a mitigating factor); there were two violations of the same Reliability Standard (PER-003-0 R1) that demonstrated the repeat nature of the violation (which was evaluated as an aggravating factor); the violations did not constitute a serious or substantial risk to BPS reliability; and there were no additional aggravating or mitigating factors.

Penalty: $60,000 (aggregate for 26 violations)

FERC Order: Order issued July 27, 2012 (no further review)

NorthWestern Corporation, FERC Docket No. NP10-2-000 (October 14, 2009)

Reliability Standard: COM-001-1

Requirement: R2

Violation Risk Factor: Medium

Violation Severity Level: Not provided

Region: WECC

Issue: In January 2008, NorthWestern Corporation (NorthWestern) self-reported that while it was managing, alarming, testing, and actively monitoring its vital telecommunications facilities, it did not develop a list of these telecommunications facilities until December 2007.

Finding: WECC found that this violation did not pose a serious or substantial risk to the bulk power system since NorthWestern was still managing, alarming, testing, and actively monitoring its vital telecommunications facilities before the list was developed. The violation was primarily a documentation issue. In addition, the violation was self-reported and this was NorthWestern's first violation of this Reliability Standard. A mitigation plan has been completed.

Penalty: $0

FERC Order: Issued November 13, 2009 (no further review)

Public Utility District No. 1 of Clark County (CKPD), Docket No. NP12-5 (November 30, 2011)

Reliability Standard: COM-001-1

Requirement: R1, R2, R5

Violation Risk Factor: High (R1, R2); Lower (R5)

Violation Severity Level: Severe (All)

Region: WECC

Issue: In preparation for its registration with NERC as a TOP, in April 2009 CKPD self-reported non-compliance with COM-001-1 R1. CKPD explained that its TOP, Bonneville Power Administration (BPA), informed it on April 6, 2009, that it would no longer function as CKPD’s TOP effective immediately. As a result, CKPD was required to register as a TOP and report non-compliance with the Standard. CKPD reported that the requirements of COM-001-1 were new to CKPD because of its TOP registration, and at the time of registration, it was unable to provide sufficient telecommunications facilities for the exchange of interconnection and operating information, in violation of R1. CKPD also self-reported non-compliance with COM-001-1 R2 because it did not manage, alarm, test and/or actively monitor vital telecommunications facilities, in violation of R2. CKPD also self-reported non-compliance with COM-001-1 R5 by failing to have written operating instructions and procedures to enable its continued operation during the loss of telecommunication facilities.

Finding: WECC determined the violations did not pose a serious or substantial risk to the reliability of the BPS and considered that CKPD was taking over a new TOP function. Regarding R1, even though there were no written procedures in place by CKPD to operate without such communications facilities, the basic lines of communications (voice and data) were in place during the period CKPD was coming into compliance with the Standard. Regarding R2, even though CKPD did not manage, alarm, test and/or actively monitor vital telecommunications facilities, CKPD had established communications with the RC and BPA. Regarding R5, BPA assured the RC that it would continue to coordinate outage plans, day-to-day routine real-time communications and notifications and any unplanned work forced by equipment failures, storms, etc. In addition, at the time of its registration for the TOP function, CKPD was satisfying the requirements for its other functions as a TO, PSE, LSE, DP, GO and GOP. BPA performed tests on CKPD’s electric system during April 2009 which showed that it was not conducting TOP duties at the facility and the facility was not required to maintain system reliability. BPA also reported that CPKD employs experienced operators and also has internal maintenance procedures including a 24-hour dispatch center. WECC assessed no penalty for the violations based on the extenuating circumstances surrounding the non-compliance. In particular, BPA’s notice to CKPD that it would no longer operate as the TOP was unexpected and effective immediately. Consequently, CKPD was immediately responsible for registration and compliance with all applicable TOP standards. WECC also considered the following mitigating factors: the violations were self-reported, mitigation plans were quickly submitted and timely completed; the risk to the BPS was not serious or substantial; the violations were not repeat violations; and CKPD did not dispute the violations.

Penalty: $0 (for 33 violations)

FERC Order: Issued December 30, 2011 (no further review)

Public Utility District No. 1 of Snohomish County (SNPD), Docket No. NP12-22-000 (March 30, 2012)

Reliability Standard: COM-001-1

Requirement: R2, R5

Violation Risk Factor: Medium (R2), Lower (R5)

Violation Severity Level: Severe (R2, R5)

Region: WECC

Issue: SNPD registered as a TOP with NERC effective as of February 6, 2009, and subsequently, SNPD submitted self-reports addressing non-compliance with NERC Reliability Standards. SNPD is located in the Bonneville Power Administration (BPA) Control Area. BPA was registered with NERC as the area TOP, and BPA had informed SNPD that it was not required to register as a TOP with NERC; however, after review of a FERC order discussing TOP compliance, on December 24, 2008, BPA notified SNPD that it would no longer serve as its TOP, effective immediately. SNPD then registered as a TOP and reported itself as non-compliant with applicable NERC Reliability Standards. SNPD underwent a WECC audit in January 2012 and no compliance violations were found.

Starting on February 6, 2009, the date SPND registered as a TOP with NERC, SNPD was in violation of COM-001-1 R2 and R5 because it was not managing, alarming, testing and/or actively monitoring vital telecommunication facilities (R2). Regarding R5, SNPD had no documented operating instructions and procedures to allow continued operation during a loss of telecommunications facilities.

Finding: The violations posed no serious or substantial risk to BPS reliability. WECC considered that SNPD was new to the TOP role because of a registration issue. During the period of time SNPD was not managing, alarming, testing and/or actively monitoring vital telecommunication facilities and did not have documented operating instructions and procedures to enable continued operation during the loss of telecommunications facilities, BPS risk was mitigated because SNPD has alarmed and monitored telecommunication circuits. SNPD employees had received training on alarm response and the telecommunications facilities were actively monitored. SNPD has backup systems and operators had the ability to communicate with others involved in an event. In addition, BPA conducted a technical assessment of SPND’s electrical system in determining whether it would act as SPND’s TOP, and the assessment results showed that BPA was not performing TOP duties in the first place, and second it did not need control of the SNPD system for BPS reliability. While SNPD was working towards TOP certification, BPA performed TOP duties such as coordinating outage plans, day-to-day routine real-time communications and notifications and any unplanned work forced by equipment failures, storms, etc. BPA assured the RC it would continue to communicate any planned and emergency outages and would work diligently with SNPD to obtain full TOP certification. At the time SNPD registered as a TOP, it was working on compliance with its other functions as Transmission Owner (TO), Transmission Provider (TP), Purchasing-Selling Entity (PSE), Load Serving Entity (LSE), Distribution Provider (DP), Generator Owner (GO) and Generator Operator (GOP).

WECC assessed no penalty due to the circumstances surrounding the non compliance. BPA unexpectedly notified SNPD that it would not be its TOP, effective immediately on December 28, 2008. SNPD then found itself immediately required to be NERC compliant. SNPD submitted its self reports in a timely manner and in addition submitted mitigation plans which were timely completed. The violations were not repeat violations and were not contested by SNPD.

Penalty: $0

FERC Order: Issued April 30, 2012 (no further review)

TransAlta Centralia Generation, FERC Docket No. NP11-55-000 (November 30, 2010)

Reliability Standard: COM-001-1

Requirement: R2

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: WECC

Issue: TransAlta self-reported that it had not tested its vital telecommunications facilities consistent with its testing procedures, though it had regularly tested such facilities. TransAlta also reported that it did not create test records at the time testing occurred.

Finding: It was determined by WECC that the violation did not pose a serious or substantial risk to the reliability of the bulk power system because TransAlta represented that it was conducting testing of its telecommunications facilities, and there was no record of any failure of such facilities during the period of the violation. The duration of violation was April 29, 2008, when TransAlta was registered with NERC, through July 17, 2009. In determining the penalty, consideration was given to the fact that TransAlta self-reported the violation, and this was TransAlta's first occurrence of violation of the Reliability Standards.

Penalty: $3,000

FERC Order: Issued December 30, 2010 (no further review)

Unidentified Registered Entity, FERC Docket No. NP11-1-000 (October 7, 2010)

Reliability Standard: COM-001-1

Requirement: R2

Violation Risk Factor: Medium

Violation Severity Level: N/A

Region: WECC

Issue: An Unidentified Registered Entity (URE) self reported a violation for failing to actively monitor some alarm points on a 24/7 basis and because it had inadequate procedures in place to document trouble calls and maintenance on telecommunications solutions. The URE identified the violation during a self-evaluation in which it determined it needed to improve its procedure to coordinate telecommunications solutions across its system.

Finding: The violation did not pose a serious or substantial risk to the reliability of the bulk power system because the URE had adequate procedures in place for maintenance, responding to alarms and coordinating telecommunications issues, but had just failed to document those procedures.

Penalty: $106,000 (aggregate for multiple violations)

FERC Order: Issued November 5, 2010 (no further review)

Unidentified Registered Entity, FERC Docket No. NP11-2-000 (October 7, 2010)

Reliability Standard: COM-001-1

Requirement: R3

Violation Risk Factor: Lower

Violation Severity Level: N/A

Region: WECC

Issue: During an on-site audit, WECC determined that an Unidentified Registered Entity (URE) could not provide sufficient evidence of procedures to resolve telecommunication failures between operating personnel and coordination with neighboring entities.

Finding: The violation did not pose a serious or substantial risk to the reliability of the bulk power system because although the URE did not have the required documentation, the URE did have adequate capabilities to investigate and recommend solutions to telecommunications problems with neighboring utilities

Penalty: $9,000 (aggregate for multiple violations)

FERC Order: Issued November 5, 2010 (no further review)

Unidentified Registered Entity, FERC Docket No. NP11-137-000 (March 30, 2011)

Reliability Standard: COM-001-1

Requirement: R2

Violation Risk Factor: Medium

Violation Severity Level: Moderate

Region: WECC

Issue: During a compliance audit, URE failed to provide complete maintenance records although it provided evidence of telecommunication monitoring procedures. Moreover, URE’s records did not reflect consistent follow-up regarding problems discovered during testing. Duration of violation was June 18, 2007, when the Standard became enforceable, through June 24, 2009, when the violations were mitigated.

Finding: WECC Enforcement determined that the violation did not pose a serious or substantial risk to the bulk power system because WECC verified that URE had procedures to manage, alarm, test and actively monitor vital telecommunications facilities, and some of the required maintenance was verifiably performed. Further, the NERC BOTCC concluded the penalty appropriate because this was URE’s first violation of most of the Standards involved, URE self-reported 28 of 30 violations, and URE was cooperative during the investigation.

Penalty: $106,000 (aggregate for 30 violations)

FERC Order: Issued April 29, 2011 (no further review)

Unidentified Registered Entity, FERC Docket No. NP11-218-000 (June 29, 2011)

Reliability Standard: COM-001-1

Requirement: R2, R3

Violation Risk Factor: Medium (R2), Lower (R3)

Violation Severity Level: Moderate (R2), Severe (R3)

Region: WECC

Issue: The Registered Entity self-reported that it did not possess adequate documentation regarding its management, alarming, testing and monitoring of its vital telecommunication systems (including the special attention given to its emergency telecommunication facilities and equipment not involved with routine communications) (R2). The Registered Entity also self-reported that it did not establish appropriate procedures needed to coordinate telecommunications among the Reliability Coordinator, Transmission Operator and Balancing Authority areas (R3).

Finding: WECC and the Registered Entity entered into a settlement agreement to resolve multiple violations, whereby the Registered Entity agreed to pay a penalty of $130,000 and to undertake other mitigation measures. WECC found that the COM-001-1 violations constituted a minimal risk to bulk power system reliability since the Registered Entity, through proper staffing, was actually coordinating its telecommunications problems within its area and with other areas. The duration of the COM-001-1 violations was from June 18, 2007 through April 20, 2010. In approving the settlement agreement, NERC found that there were three instances of noncompliance with Regional Reliability Standard PRC-STD-005-1 WR1 (which was evaluated as an aggravating factor); some of the violations were self-reported; the Registered Entity was cooperative during the enforcement process and did not conceal the violations; the Registered Entity had a compliance program in place (which was evaluated as a mitigating factor); the penalties for the violations of Reliability Standards EOP-001-0 R6 and EOP-005-1 R2 were aggregated since both penalties were based on a single act of noncompliance; the penalties for the violations of Reliability Standards PRC-STD-005-1 WR1 and VAR-STD-002b-1 WR1 were based on the respective Sanction Tables; and there were no additional aggravating or mitigating factors.

Penalty: $130,000 (aggregate for 27 violations)

FERC Order: Issued July 29, 2011 (no further review)

Unidentified Registered Entity (URE), Docket No. NP12-47-000 (September 28, 2012)

Reliability Standard: COM-001-1

Requirement: 5

Violation Risk Factor: Lower

Violation Severity Level: Severe

Region: WECC

Issue: URE was found to be in violation of COM-001-1 R1 because URE failed to have operating procedures and instructions directing URE operators to man substations should a loss of communications occur. As such, URE had no operating procedures and instructions to enable continued operations of its system during the loss of its telecommunications equipment.

Finding: The violation was deemed to pose moderate risk to BPS reliability because URE had procedures in one of its SOP document to implement fully redundant communications facilities at its backup control center, and had provisions for training its system operators. In determining the appropriate penalty, URE was given mitigating credit for its internal compliance program.

Penalty: $65,000 (for 11 violations)

FERC Order: Issued October 26, 2012 (no further review)

Utilities Commission of New Smyrna Beach, FERC Docket No. NP10-2-000 (October 14, 2009)

Reliability Standard: COM-001-1

Requirement: R5

Violation Risk Factor: Lower

Violation Severity Level: Not provided

Region: FRCC

Issue: Utilities Commission of New Smyrna Beach ("New Smyrna") did not have documented procedures regarding continued operation of the transmission system during the loss of data communications. Duration of the violation was from June 18, 2007 when the standard became enforceable through October 14, 2008.

Finding: Penalty was deemed appropriate because this was New Smyrna's first violation of this standard, and the violation did not pose a serious or substantial threat to the reliability of the bulk power system because it was a documentation issue.

Penalty: $0

FERC Order: Issued November 13, 2009 (no further review)

WECC RC [California Mexico Reliability Coordinator OC], Docket No. NP10-160-000 (September 13, 2010)

Reliability Standard: COM-001-1

Requirement: R3

Violation Risk Factor: Lower

Violation Severity Level: Not provided

Region: NERC as Compliance Enforcement Authority (NCEA)

Issue: The California Mexico Reliability Coordinator could not provide evidence to show that, during the period from June 18, 2007 through January 1, 2009, it had the ability to investigate or suggest solutions for problems with telecommunications facilities as required by the Reliability Standard.

Finding: The violation was the first violation of this Reliability Standard and it did not constitute a serious or substantial risk to the bulk power system. WECC was certified as the Reliability Coordinator on January 1, 2009 and assumed all further responsibilities. The violation was mitigated through the dissolution of the entity and NERC's certification of WECC as the new Reliability Coordinator for the region.

Penalty: $0

FERC Order: Issued October 13, 2010 (no further review)