NERC Case Notes: Florida Blackout (IN08-5-000) | White & Case LLP International Law Firm, Global Law Practice
NERC Case Notes: Florida Blackout (IN08-5-000)

NERC Case Notes: Florida Blackout (IN08-5-000)

Florida Power and Light Company (Florida Blackout), FERC Docket No. IN08-5-000 (October 8, 2009)

Region: FRCC

Issue: On February 26, 2008, parts of Southern Florida served by Florida Power and Light Company (FPL) had a loss of load (the Florida Blackout), with the loss of 22 transmission lines, 4300 MW of generation, and 3560 MW of customer load. The Florida Blackout caused a loss of power for millions of customers for several hours. FERC’s Office of Enforcement and Office of Electric Reliability, FRCC, and NERC all participated in a non-public, formal investigation concerning the causes of the Florida Blackout and whether any mandatory Reliability Standards were violated.

Reliability Standards: Neither the FERC order approving the Stipulation and Consent Agreement nor the Stipulation and Consent Agreement specify which Reliability Standards were violated in the Florida Blackout. Commissioners Spitzer and Moeller filed concurrences stating that the FERC order should have specifically identified which Reliability Standards were violated and how the facts applied to each of those alleged violations. While it was alleged that FPL violated the BAL, COM, EOP, PER, PRC, TOP, and TPL group of Reliability Standards, FPL did not admit that its actions constituted violations of the Reliability Standards.

Finding: The Florida Blackout was determined to have originated in the FPL system at the Flagami Substation and caused by the failure of the circuit switcher’s bottle interrupter, which set off a rapidly cascading series of faults on FPL’s system. Although FPL did not concede that it violated the Reliability Standards, it entered into a Stipulation and Consent Agreement, with staff at FERC’s Office of Enforcement and NERC, and agreed to pay a civil penalty of $25 Million. In the Stipulation and Consent Agreement, FPL agreed to enhance its compliance program, enhance training and certification requirements for operating employees, improve its frequency response, update its emergency operating procedures, provide more staffing for the analysis of the bulk electric system, ensure that specified equipment is properly inspected and maintained, submit quarterly progress reports to FERC’s Office of Enforcement and NERC, and conduct an independent audit within one year to evaluate FPL’s compliance with the Stipulation and Consent Agreement.

Penalty: $25 Million – (a) U.S. Treasury: $10 Million; (b) NERC: $10 Million; and (c) Bulk Electric System Reliability Enhancement Measures: $5 Million. If the money for the Reliability Enhancement Measures has not been spent or committed to projects approved by FERC and NERC within three years, the remaining part of the $5 Million will be paid and divided equally between the U.S. Treasury and NERC.