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

NERC Case Notes: Reliability Standard TOP-001-1

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American Electric Power Service Corporation as agent for Appalachian Power Company, Columbus Southern Power Company, Indiana Michigan Power Company, Kentucky Power Company, Kingsport Power Company, Ohio Power Company, and Wheeling Power Company, FERC Docket No. NP13-35 (May 30, 2013)

Reliability Standard: TOP-001-1

Requirement: 1

Violation Risk Factor: High

Violation Severity Level: Severe

Region: RFC

Issue: On the evening of June 23, 2010, PJM, American Electric Power Service Corporation's (AEP) Reliability Coordinator, experienced multiple outages on the AEP 138 kV system in the Benton Harbor area of southwest Michigan (the Kenzie Creek Event). During RFC's compliance investigation of the Kenzie Creek Event, RFC determined that AEP's System Control Center (SCC) operator did not demonstrate that he had the required responsibility and clear decision-making authority to take the necessary actions to ensure reliability and to exercise specific authority to alleviate operating emergencies. For example, when PJM told the AEP SCC operator to open a specific breaker, the AEP SCC operator responded that it would make the request to of AEP TDC. But, the communication was not treated as a directive as AEP Transmission Dispatch Center (TDC) said that it would have to check with the distribution dispatch center about the possibility of opening the breaker. In addition, in discussions concerning a different breaker, the AEP SCC operator did not communicate a directive and, instead, asked how the AEP TDC operator felt about opening the breaker. The AEP SCC operator also agreed to delay the opening of any additional breakers until the AEP TDC supervisor arrived at the control center, which suggested that the AEP SCC operator was unable to make the decision to open additional breakers.

Finding: RFC found that this violation constituted a serious and substantial risk to BPS reliability since it increased the chance that the TOP will have unclear operating capabilities and responsibilities. Despite the unclear decision-making authority, the AEP operator opened the relevant breakers and was continuously engaged with PJM during the Kenzie Creek Event. The duration of the TOP-001-1 R1 violation was from June 23, 2010 through October 24, 2012. AEP admitted to the facts of the violations. In approving the settlement agreement, NERC BOTCC considered the fact that one of the violations was self-reported and that AEP had a compliance program in place (which was viewed as a partial mitigating factor). AEP also had two previous violations of FAC-009-1 R1. AEP was cooperative during the enforcement process and did not conceal the violations. Furthermore, AEP conducted an apparent cause analysis after the Kenzie Creek Event. In regards to the Kenzie Creek incident, one violation (FAC-009-1 R1) constituted a minimal risk to BPS reliability; five violations (COM-002-2 R2, EOP-003-1 R8, IRO-001-1.1 R8, PER-002-0 R1 and TOP-001-1 R5) constituted a moderate risk to BPS reliability; and four violations (EOP-001-0 R3, EOP-003-1 R1 and TOP-001-1 R1 and R2) constituted a serious and substantial risk to BPS reliability.

Total Penalty: $225,000 (aggregate for 10 violations)

FERC Order: Issued June 28, 2013 (no further review)

American Electric Power Service Corporation as agent for Appalachian Power Company, Columbus Southern Power Company, Indiana Michigan Power Company, Kentucky Power Company, Kingsport Power Company, Ohio Power Company, and Wheeling Power Company, FERC Docket No. NP13-35 (May 30, 2013)

Reliability Standard: TOP-001-1

Requirement: 2

Violation Risk Factor: High

Violation Severity Level: Severe

Region: RFC

Issue: On the evening of June 23, 2010, PJM, American Electric Power Service Corporation's (AEP) Reliability Coordinator, experienced multiple outages on the AEP 138 kV system in the Benton Harbor area of southwest Michigan (the Kenzie Creek Event). During RFC's compliance investigation of the Kenzie Creek Event, RFC determined that AEP did not take the immediate actions needed to alleviate the operating emergency. Although AEP and PJM's thermal operating guidelines specify that an actual load dump overload should be corrected within five minutes, AEP did not take action to address the overload on the Kenzie Creek-Valley 138 kV line until 15 minutes after being notified by PJM. Furthermore, AEP's action was ineffective and the actual loading on the line remained above the load dump rating for an additional 50 minutes. Even after AEP's subsequent action to correct the actual load dump overload, the line was still above its Emergency Rating.

Finding: RFC found that this violation constituted a serious and substantial risk to BPS reliability since it increased the chance that the TOP would delay actions needed to alleviate operating emergencies. Although it did not undertake immediate action, AEP did engage in actions to alleviate the operating emergency. The duration of the TOP-001-1 R2 violation was for approximately one hour and 15 minutes on June 23, 2010. AEP admitted to the facts of the violations. In approving the settlement agreement, NERC BOTCC considered the fact that one of the violations was self-reported and that AEP had a compliance program in place (which was viewed as a partial mitigating factor). AEP also had two previous violations of FAC-009-1 R1. AEP was cooperative during the enforcement process and did not conceal the violations. Furthermore, AEP conducted an apparent cause analysis after the Kenzie Creek Event. In regards to the Kenzie Creek incident, one violation (FAC-009-1 R1) constituted a minimal risk to BPS reliability; five violations (COM-002-2 R2, EOP-003-1 R8, IRO-001-1.1 R8, PER-002-0 R1 and TOP-001-1 R5) constituted a moderate risk to BPS reliability; and four violations (EOP-001-0 R3, EOP-003-1 R1 and TOP-001-1 R1 and R2) constituted a serious and substantial risk to BPS reliability.

Total Penalty: $225,000 (aggregate for 10 violations)

FERC Order: Issued June 28, 2013 (no further review)

American Electric Power Service Corporation as agent for Appalachian Power Company, Columbus Southern Power Company, Indiana Michigan Power Company, Kentucky Power Company, Kingsport Power Company, Ohio Power Company, and Wheeling Power Company, FERC Docket No. NP13-35 (May 30, 2013)

Reliability Standard: TOP-001-1

Requirement: 5

Violation Risk Factor: High

Violation Severity Level: Severe

Region: RFC

Issue: On the evening of June 23, 2010, PJM, American Electric Power Service Corporation's (AEP) Reliability Coordinator, experienced multiple outages on the AEP 138 kV system in the Benton Harbor area of southwest Michigan (the Kenzie Creek Event). During RFC's compliance investigation of the Kenzie Creek Event, RFC determined that AEP did not inform PJM of real-time emergency conditions on its Kenzie Creek-Valley 138 kV line. Instead, PJM was required to inform AEP that its line was above its load dump rating (while AEP's System Control Center (SCC) operator argued that the relevant line only exceeded its Emergency Rating, not its load dump rating).

Finding: RFC found that this violation constituted a moderate risk to BPS reliability since it increased the chance that the TOP would be unable to mitigate the emergency. But, within two minutes of the initial load dump rating exceedance, PJM and AEP were engaged in discussions on possible controlling actions (which mitigated the risk to the BPS). The duration of the TOP-001-1 R5 violation was for approximately one hour and 9 minutes on June 23, 2010. AEP admitted to the facts of the violations. In approving the settlement agreement, NERC BOTCC considered the fact that one of the violations was self-reported and that AEP had a compliance program in place (which was viewed as a partial mitigating factor). AEP also had two previous violations of FAC-009-1 R1. AEP was cooperative during the enforcement process and did not conceal the violations. Furthermore, AEP conducted an apparent cause analysis after the Kenzie Creek Event. In regards to the Kenzie Creek incident, one violation (FAC-009-1 R1) constituted a minimal risk to BPS reliability; five violations (COM-002-2 R2, EOP-003-1 R8, IRO-001-1.1 R8, PER-002-0 R1 and TOP-001-1 R5) constituted a moderate risk to BPS reliability; and four violations (EOP-001-0 R3, EOP-003-1 R1 and TOP-001-1 R1 and R2) constituted a serious and substantial risk to BPS reliability.

Total Penalty: $225,000 (aggregate for 10 violations)

FERC Order: Issued June 28, 2013 (no further review)

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

Reliability Standard: TOP-001-1

Requirement: 1

Violation Risk Factor: High

Violation Severity Level: Severe

Region: WECC

Issue: AVBA self-reported, as a TOP, that it had not provided its operating personnel with properly documented authorization to implement real-time actions necessary. AVBA had provided its operating personnel with verbal authorization.

Finding: WECC found that the TOP-001-1 violation only constituted a minimal risk to BPS reliability since AVBA's operating personnel had received verbal authorization to implement the necessary real-time actions. The duration of the TOP-001-1 violation was from November 5, 2007 through May 6, 2009. AVBA stipulated to the violations. In approving the settlement agreement, the NERC BOTCC considered the fact that these violations were AVBA's first violations of the relevant Reliability Standards; the violations were not intentional and were promptly mitigated once discovered; and AVBA was cooperative during the enforcement process and did not conceal the violations. In addition, all but one of AVBA'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)

Brazos Electric Power CoOp. Inc., FERC Docket No. NP12-10 (December 30, 2011)

Reliability Standard: TOP-001-1

Requirement: R3

Violation Risk Factor: High

Violation Severity Level: Severe

Region: TRE

Issue: Brazos, a GO, self-reported a violation of IRO-001-1.1 due to its failure to comply with a directive of its RC, the Electric Reliability Council of Texas (ERCOT). On February 2, 2011, ERCOT had a system emergency and issued a directive that no units should be taken offline during the emergency except for forced outages. During that emergency and in violation of the directive, Brazos removed a 15 MW hydroelectric resource from service for the purpose of conserving water. Brazos did recognize its mistake and ordered the unit back in service, but the unit was unable to restart immediately due to an operational limitation delay of 30 minutes.

Finding: TRE found the violation constituted a minimal risk to BPS reliability. The unit was only 15 MW and Brazos had additional generation from other resources to cover the loss of power generated by the one unit. TRE considered Brazos’ compliance program as a mitigating factor in determining the penalty amount.

Penalty: $8,500 (aggregate for two violations)

FERC Order: Issued January 27, 2012 (no further review)

Duke Energy Generation Services, Inc. (Duke Energy), Docket No. NP13-12-000 (December 31, 2012)

Reliability Standard: TOP-001-1

Requirement: 3

Violation Risk Factor: High

Violation Severity Level: Severe

Region: Texas RE

Issue: While conducting a Spot Check, Texas RE found that Duke Energy had failed to comply with a Reliability Coordinator (RC) directive. ERCOT, the RC, instructed Duke Energy to lower generation for the Notrees Wind Farm (NWF) over time to zero MW for a post-contingent overload. Duke Energy began to curtail its output of the wind farm, but failed to comply for a period of 28 minutes where its output climbed above the level instructed. After a call between the ERCOT ISO and the Duke Energy operator, minutes after the rise, the output was brought down to zero.

Finding: Texas RE found that the violation posed a minimal risk to BPS reliability, but not a serious or substantial risk. ERCOT was able to drop load from three other Qualified Scheduling Entities. Moreover, ERCOT could only direct NWF to ramp down a maximum of 140 MW, only 0.19% of the 74,000 MW total generating capacity for peak demand in ERCOT. In fact, ERCOT only directed NWF to ramp down 12 MW of generation. In determining the appropriate penalty and approving the settlement agreement, Texas RE considered Duke Energy’s actions to address the issue and prevent recurrence. Duke Energy: (1) transferred its wind operations desk to an automated facility with 24/7 monitoring; (2) reviewed the automation of its wind turbine controls; (3) required its generation dispatchers to complete ERCOT’s computer-based training program; (4) required its generation dispatchers to review and sign off on its telephone communication procedure; and (5) updated its energy management system (EMS), which incorporated electronic notifications.

Total Penalty: $32,000 (aggregate for 3 violations)

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

El Paso Electric Company, FERC Docket No. NP11-53-000 (November 30, 2010)

Reliability Standard: TOP-001-1

Requirement: R4

Violation Risk Factor: High

Violation Severity Level: Severe

Region: WECC

Issue: El Paso Electric Company ("EPE") self-reported that its marketing employees did not comply with a reliability directive issued by an EPE transmission employee acting as the Transmission Operator for the EPE LSE function.

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 the directive was issued during a period when EPE's system was not experiencing an emergency, nor was any other reserve sharing group member experiencing an emergency. The duration of violation was November 30, 2009. EPE was given credit for self-reporting the violation.

Penalty: $8,000

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

EnerNOC, Inc. (EnerNOC), Docket No. NP13-25-000 (February 28, 2013)

Reliability Standard: TOP-001-1

Requirement: 4

Violation Risk Factor: High

Violation Severity Level: Severe

Region: TRE

Issue: During a spot check in March 2012, TRE found that EnerNOC, at a time when the ERCOT system was stressed due to a cold weather even on February 2, 2011, did not comply with an ERCOT RC/TOP directive issued at 5:49 am to shed Emergency Interruptible Load Service load within 10 minutes of the request. Responding to the load shed request would not have violated safety, equipment, regulatory or statutory requirements. ERCOT issued a verbal dispatch instruction to EnerNOC to interrupt the non-business hour load they had contracted with ERCOT to shed, but the EnerNOC network operations center operator, as a result of human error, did not initiate any dispatch actions in response. EnerNOC was required to comply with the directive and institute the load shed by 5:59 am, but did not shed its load until the 15-minute interval ending at 9:15am.

Finding: TRE found that the TOP-001-1 violation constituted a moderate risk to BPS reliability as ERCOT had declared an Energy Emergency Alert-3 (i.e., ERCOT had difficulty maintaining a system frequency of 59.8 Hz and firm load was required to be shed). All resources, including demand response providers such as EnerNOC, were required to participate in order to minimize the amount of firm load shedding. But, EnerNOC was only required to shed 80 MW of non-business hour load and provided its curtailment service three hours and fifteen minutes late. The duration of the TOP-001-1 violation was approximately three hours on February 2, 2011. EnerNOC acknowledged the violation. In approving the settlement agreement, the NERC BOTCC considered the fact that these were the EnerNOC’s first violations of the relevant Reliability Standards. EnerNOC was also cooperative during the enforcement process and did not conceal the violations. While EnerNOC did not have a compliance program in place when the violations occurred, EnerNOC has undertaken measures to improve its centralized compliance program after an audit of its market activity in ISO NE and NYISO (including budgeting $500,000-$700,000 for compliance activities in 2013). Prior to this centralized compliance program, EnerNOC followed a decentralized approach that relied on numerous different policies but that did foster a compliance ethic among its employees. In addition, EnerNOC paid $45,000 to the Public Utility Commission of Texas to address this same incident, which is also the same as EnerNOC’s estimated costs to undertake additional agreed-upon compliance measures.

Total Penalty: $25,000 (aggregate for 2 violations)

FERC Order: Issued March 29, 2013 (no further review)

Enerwise Global Technologies (Comverge, Inc.), FERC Docket No. NP14-2 (October 30, 2013)

Reliability Standard: TOP-001-1

Requirement: 4

Violation Risk Factor: High

Violation Severity Level: Severe

Region: TRE

Issue: As a result of a spot check, TRE determined that Enerwise Global Technologies (Enerwise) did not inform the RC/TOP, as required, of its inability to comply with a February 2, 2011 directive. In response to the 5:49 am directive, issued in response to cold weather-related generating unit forced outages and de-ratings, to deploy Emergency Interruptible Load Service (EILS), Enerwise was supposed to interrupt 32.5 MW of load during non-business hour within ten minutes. But, Enerwise failed to inform the RC/TOP that it could not comply with the directive (and Enerwise did not shed the load until 8:53 am after the issuance of the second EILS directive).

Finding: TRE found that the TOP-001-1 violation constituted a moderate risk to BPS reliability as the violation occurred during an Energy Emergency Alert 3 event on ERCOT’s system and all resources were necessary in order to minimize firm load curtailment. But, Enerwise’s EILS load shed obligation was only 32.5 MW, as compared to the total 4000 MW of firm load that ERCOT directed to be shed. The TOP-001-1 violation lasted for approximately 3 hours on February 2, 2011. Enerwise neither admitted nor denied the violations. In approving the settlement agreement, NERC BOTCC considered the fact that the violations were Enerwise’s first violations of the relevant Reliability Standards. The violations were not intentional and Enerwise was cooperative during the enforcement process and did not conceal the violations. The violations did not constitute a serious or substantial risk to BPS reliability.

Total Penalty: $19,000 (aggregate for 2 violations)

FERC Order: Issued November 29, 2013 (no further review)

Iberdrola Renewables, FERC Docket No. NP11-258-000 (August 11, 2011)

Reliability Standard: TOP-001-1

Requirement: R3

Violation Risk Factor: High

Violation Severity Level: Severe

Region: TRE

Issue: During an audit in 2010, TRE found that on December 21, 2008, Iberdrola Renewables (Iberdrola) did not properly follow a directive (or Verbal Dispatch Instruction) from ERCOT that it disconnect its Penascal wind farm from the grid.

Finding: TRE and Iberdrola entered into a settlement agreement to resolve multiple violations, whereby Iberdrola agreed to pay a penalty of $7,000 and to undertake other mitigation measures. TRE found that the TOP-001-1 violation did not constitute a serious or substantial risk to bulk power system reliability since the Penascal wind farm was in testing mode and only exporting approximately 26 MW of power to the ERCOT grid when the directive was issued. In addition, there was confusion over the exact real power output from the Penascal wind farm (as a result of telemetry issues), which is what caused ERCOT to issue the directive. The TOP-001-1 violation occurred on December 21, 2008. In approving the settlement agreement, NERC found that these were Iberdrola’s first violations of the relevant Reliability Standards; Iberdrola was cooperative during the enforcement process and did not conceal the violations; Iberdrola had a compliance program in place (which was evaluated as a mitigating factor); and there were no additional aggravating or mitigating factors.

Penalty: $7,000 (aggregate for 4 violations)

FERC Order: Issued September 9, 2011 (no further review)

Loraine Windpark Project LLC, Docket No. NP12-18 (February 29, 2012)

Reliability Standard: TOP-001-1

Requirement: R3

Violation Risk Factor: High

Violation Severity Level: Severe

Region: Texas RE

Issue: After receiving an incident report from ERCOT, Texas RE conducted a spot check of Loraine Windpark’s compliance of IRO-001-1.1 R8 and TOP-001-1 R3. Loraine Windpark, a GO, did not follow a directive issued by ERCOT for the time period 13:47 (CPT) until 16:30 on November 11, 2010, as required by TOP-001-1 R3. During a nodal market readiness test (Nodal LFC Test) being conducted by ERCOT, a directive related to the generation output levels for facilities within its control (Lone Wolf I and Lone Wolf II) was not followed; however, ERCOT was not notified that the reason was because complying with the directive would violate safety, equipment, or regulatory or statutory requirements, according to Loraine Windpark.

Tenaska Power Services (TPS) uses Morgan Stanley SQ3 for Qualified Scheduling Entity (QSE) services for Loraine Windpark. Also, Morgan Stanley is the scheduling representative for Lone Wolf Wind Generator Resource (Lone Wolf). While conducting the Nodal LFC Test, TPS was told to follow the nodal base points for Lone Wolf, which was over-generating by 37 MW, and Lone Wolf Unit 2, which was over-generating by 38 MW. The ERCOT System Operator did not reference the West-North stability limit during his call to the QSE scheduling representative for Lone Wolf. At 14:27:20, TPS called the ERCOT Operator to report that Lone Wolf was unable to follow its base points, as instructed by ERCOT, due to SCADA system control issues which ultimately led to the finding that a hardware failure was preventing the SCADA system from properly curtailing Lone Wolf Units 1 and 2. The SCADA system had been installed and successfully tested by Lone Wolf in advance of the Nodal LFC Test.

When Loraine Windpark’s owners were alerted to the directive from ERCOT, they instructed the plant operators at the Lone Wolf facility to manually follow all requests to curtail while work to correct the SCADA system technical issues was being done. The ERCOT Operator clarified that the instruction was considered to be a directive by ERCOT at 14:27:20, when Morgan Stanley SQ3 called the ERCOT Operator to explain the problems Lone Wolf was having with the SCADA system. At approximately 16:30, Loraine Windpark began to manually follow its nodal base points as directed by ERCOT.

Finding: The violation constituted a moderate risk to BPS reliability because ERCOT ISO used other generation reductions in order to reduce flow on the West-North stability limit. However, power flow on the West-North stability limit (consisting of six 345 kV lines) was exceeded by about 137 MW due to Loraine Windpark failing to follow the directive. Loraine Windpark’s compliance program was neither a mitigating nor aggravating factor in determining the appropriate penalty; however, Loraine Windpark was given credit for mitigating actions “above and beyond” the norm.

Penalty: $32,500 (aggregate for 2 violations)

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

Luminant Energy Company, LLC, FERC Docket No. NP11-222-000 (June 29, 2011)

Reliability Standard: TOP-001-1

Requirement: R3

Violation Risk Factor: High

Violation Severity Level: Severe

Region: TRE

Issue: As a result of a self report, TRE determined Luminant Energy Company, LLC (LEC) was in violation of TOP-001-1 R3 as a Transmission Operator because it did not follow directives from its Reliability Coordinator (ERCOT ISO) on various occasions. Specifically, on four separate days, ERCOT ISO issued a series of electronic “Out-of-Merit Energy” directives to an LEC operator, who failed to notify the relevant facility or provided the relevant facility incorrect instructions, and subsequently the generating units at issue did not comply with ERCOT ISO’s directives.

Finding: TRE assessed a $107,000 penalty for this and other violations. The violation posed a minimal risk, but did not pose a serious or substantial risk to the reliability of the Bulk Power System because although LEC did not dispatch resources as directed, the redispatch errors were not so serious that ERCOT ISO ever took action to correct the errors. Moreover, the maximum discrepancy between the directives and the actual output from the facilities was relatively modest, at 45 MW. The NERC BOTCC determined this was LEC’s first occurrence of this type of violation; LEC self-reported one of the violations, LEC was cooperative; LEC had a compliance program, which RFC considered a mitigating factor; there was no evidence of any attempt or intent to conceal a violation; and there were no other mitigating or aggravating factors.

Penalty: $107,000 (aggregate for 4 violations)

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

Milford Wind Corridor Phase I, LLC, FERC Docket No. NP13-40 (June 27, 2013)

Reliability Standard: TOP-001-1

Requirement: 1

Violation Risk Factor: High

Violation Severity Level: Severe

Region: WECC

Issue: Milford Wind Corridor Phase I, LLC (Milford Wind) self-certified that not all of its transmission operators had the required clear decision-making authority to undertake the actions needed to preserve area reliability.

Finding: WECC found that the TOP-001-1 violation only constituted a minimal risk to BPS reliability. Milford Wind’s output is not baseload generation, and if Milford Wind was unable to deliver its generation, the host BA would be able to find replacement generation without there being an adverse impact on BPS reliability. Milford Wind’s generation is non-firm and intermittent, and thus its transmission facilities are limited in use. Milford Wind’s transmission line is radial in nature and is only used to connect Milford Wind’s generation to the bulk power system. The TOP-001-1 violation occurred from May 18, 2010 through September 14, 2012. Milford neither admitted nor denied the violations. In approving the settlement agreement, NERC BOTCC considered the fact that these violations were Milford Wind’s first violations of the relevant Reliability Standard and that Milford Wind had a compliance program in place. Milford Wind was also cooperative during the enforcement process and did not conceal the violations.

Total Penalty: $81,000 (aggregate for 15 violations)

FERC Order: Issued July 26, 2013 (no further review)

MP2 Energy, LLC, FERC Docket No. NP13-50 (August 30, 2013)

Reliability Standard: TOP-001-1

Requirement: 4

Violation Risk Factor: High

Violation Severity Level: Severe

Region: TRE

Issue: During a spot check, TRE found that, during a hot weather and high electricity usage incident from August 2-5, 2011, MP2 Energy, LLC (MP2), a LSE, did not immediately inform its TOP of its inability to carry out a directive to deploy load acting as a resources (LaaR) on August 4. The interruptible load at issue did not remotely deploy as it was supposed to and the load had to be manually deployed. MP2 failed to meet its LaaR obligation until the interruptible load at issue was manually deployed, but did not inform the RC/TOP of the deployment problems until after the conclusion of the LaaR deployment.

Finding: TRE found that the TOP-001-1 violation constituted only a minimal risk to BPS reliability since MP2 was only responsible for providing 5.3 MW of LaaR (which accounted for just 0.6% of the total 882.1 MW of LaaR committed in ERCOT and 0.57% of the 928.1 MW of LaaR that was actually shed by entities). In addition, MP2 only failed to satisfy its obligation for one hour (out of three) that the LaaR service was deployed. The TOP-001-1 violation occurred on August 4, 2011. MP2 neither admitted nor denied the violations. In approving the settlement agreement, NERC BOTCC considered the fact that the violations were MP2’s first violations of the relevant Reliability Standard and MP2 had a compliance program in place when the violations occurred (which was evaluated as a mitigating factor). MP2 was also cooperative during the enforcement process and did not conceal the violations. TRE found that the violations did not present a serious or substantial risk to the BPS.

Total Penalty: $12,000 (aggregate for two violations)

FERC Order: Issued September 27, 2013 (no further review)

NextEra Energy Resources, LLC, FERC Docket No. NP15-1-000 (October 30, 2014)

Reliability Standard: TOP-001-1

Requirement: R3

Violation Risk Factor: High

Violation Severity Level: Severe

Region: Texas RE

Issue: On October 12, 2008, ERCOT, as the RC/TOP, issued an “Out of Merit Energy” (OOME) order to NextEra Energy Resources, LLC (NextEra) to reduce the output of the wind-powered facility Capricorn Ridge 4 to zero MW and an OC1, a zonal congestion management tool to redirect generation within certain zones, in order to address overloading on the Menard-San Angelo transmission line. NextEra did not timely respond to the OOME directive, which likely caused ERCOT had to activate the OC1. Thus, NextEra did not properly comply with a TOP directive or immediately inform ERCOT of its ability to comply.

Finding: Texas RE determined that the violation constituted a moderate risk to the BPS reliability as the West-North power flow exceeded the stability limits and the BPS was stressed at the time. Furthermore, there was the potential for a negative impact on the BPS if there had not been additional generation available to curtail. Moreover, it was only after several phone calls to NextEra (and after the stability limit issue had been corrected) before NextEra complied with the directive. Ultimately, the risk was mitigated because ERCOT sent regulation signals to other GOPs directing them to curtail generation. The violations are Confirmed Violations. In approving the settlement agreement, the NERC BOTCC viewed NextEra’s prior violations of similar Reliability Standards as aggravating factors. NextEra also had a compliance program in place, which was evaluated as a mitigating factor. In addition, NextEra was cooperative throughout the enforcement process and did not conceal the violations.

Penalty: $52,000 (aggregate for 2 violations)

FERC Order: Pending

PacifiCorp, FERC Docket No. IN11-6 (December 1, 2011)

Reliability Standard: TOP-001-1

Requirement: R2, R8

Issue: On February 14, 2008, a short circuit occurred on a transformer at PacifiCorp’s Huntington generation plant in Utah, which triggered an immediate loss of approximately 2800 MW of generation across PacifiCorp’s East Balancing Authority Area (“PacifiCorp East” – which consists of Utah, southeast Idaho and western Wyoming) and the shedding of approximately 183 MW of firm load in Utah. The disturbance started at 9:12 am, but PacifiCorp did not start shedding firm load until 10:44 am. Therefore, during the incident, PacifiCorp did not enact load shedding in an adequate timeframe for responding to the emergency as required (R2). While PacifiCorp was in frequent contact with its Reliability Coordinator, it did not request emergency assistance (such as the issuance of an Energy Emergency Alert) from its Reliability Coordinator or other BA prior to 10:00 am. Before 10:00 am, PacifiCorp only solicited assistance from Northwest Power Pool under the reserve sharing program (R8).

Finding: On December 1, 2011, FERC approved a Stipulation and Consent Agreement between FERC Office of Enforcement (“Enforcement”), NERC and PacifiCorp regarding PacifiCorp’s actions as a BA and TOP surrounding the February 14, 2008 disturbance. In terms of TOP-001-1 R2, PacifiCorp was unable to timely resolve operating emergencies and it did not shed firm load before 10:00 am as Enforcement and NERC determined it ought to have done. In terms of TOP-001-1 R8, Enforcement and NERC found that PacifiCorp should have more promptly requested emergency assistance when it was unable to restore its real and reactive power balance and should have enacted firm load shedding in the 9:00 am hour.

Penalty: $3,925,000 (aggregate for 23 violations)

FERC Order: http://elibrary.ferc.gov/idmws/common/opennat.asp?fileID=12829507

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

Reliability Standard: TOP-001-1

Requirement: R1

Violation Risk Factor: High

Violation Severity Level: Severe

Region: WECC

Issue: In preparation for its registration with NERC as a TOP, in April 2009 CKPD self-reported non-compliance with TOP-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 TOP-001-1 were new to CKPD because of its TOP registration, and at the time of registration, CKPD did not have documents stating that system operators have the authority to take whatever steps may be required to maintain the integrity of the BPS.

Finding: WECC determined the violation did not pose a serious or substantial risk to the reliability of the BPS because even though CKPD did not have documents delegating authority to act during operating emergencies, BPA did have system restoration procedures in place that would be available to CKPD if needed. In addition, BPA would have assisted to maintain BPS operations and CKPD’s facilities are not critical to BPS reliability. WECC recognized that 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 violation 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)

Sacramento Municipal Utility District, FERC Docket No. NP12-8 (December 30, 2011)

Reliability Standard: TOP-001-1

Requirement: R1, R2

Violation Risk Factor: High (R1, R2)

Violation Severity Level: Severe (R1, R2)

Region: NCEA

Issue: During a compliance investigation regarding a December 26, 2008 incident where Sacramento Municipal Utility District (SMUD) lost substation DC control voltage supply at its Orangevale (ORV) substation, NCEA determined that SMUD’s Power System Operator (PSO) did not properly exercise his authority in order to alleviate the operating emergency that occurred during the incident (i.e., the exposure of the BPS to the potential faults while SMUD’s protection systems were not properly and reliably operating). NCEA found that the PSO should have disconnected ORV from the BPS until adequate protection system coverage was restored (R1). NCEA also did not take immediate action, as required, to alleviate the operating emergency such as operating equipment and shedding firm load. By 10:27 am, the PSO knew that all of the 230 kV BPS transmission lines going into ORV needed to be opened in order to de-energize the substation, but instead consulted with a SMUD System Protection and Control associate protection engineer concerning what would happen if a fault occurred at ORV. The PSO also directed SMUD distribution personnel to offload customer load from ORV to other substations (while ORV remained connected to the BPS) in order to minimize customer disruptions, which delayed the opening of the 230 kV lines. The PSO improperly kept ORV connected to the BPS throughout the incident, which extended the period in which the BPS was at risk from ORV (R2).

Finding: NCEA found that the TOP-001-1 violations constituted a moderate risk to BPS reliability as having ORV remain connected to the BPS during the operating emergency caused the BPS in the vicinity of ORV to be in an unknown operating state (as it was not known what would happen to the BPS if a fault occurred at SMUD). The risk to the BPS could have been immediately removed if SMUD had opened all of ORB’s 230 kV lines by 10:31 am (and the risk could have been minimized if the feeder busses at ORV had been timely de-energized without having to wait for the offloading). ORV is a networked substation and has MVA loading on its 230 kV lines and other relevant equipment at ORV. If a fault had occurred at ORV, it may have resulted in outages or cascading losses beyond the local vicinity of SMUD’s system (even though there was no actual impact to the BPS from these violations). The relevant SMUD BPS facilities are of lesser significance to BPS reliability in the area (especially as none of the relevant SMUD BPS elements are part of a WECC Path or Nomogram). The duration of the TOP-001-1 violations was the length of the incident on December 26, 2008. SMUD has also invested over $1.17 million to install redundant measures in its backup systems in a number of its substations. In determining the aggregate penalty amount, NERC BOTCC considered the fact that these violations were SMUD’s first violations of the relevant Reliability Standards; one of the violations was self-reported; SMUD was cooperative during the enforcement process and did not conceal the violations; SMUD had a compliance program in place (which was evaluated as a mitigating factor); the violations did not pose a serious or substantial risk to BPS reliability; and there were no additional aggravating or mitigating factors.

Penalty: $100,000 (aggregate for 6 violations)

FERC Order: Issued January 27, 2012 (no further review)

Scurry County Wind LP, FERC Docket No. NP11-236-000 (July 28, 2011)

Reliability Standard: TOP-001-1

Requirement: R3

Violation Risk Factor: High

Violation Severity Level: Severe

Region: TRE

Issue: Scurry County Wind LP (SCW) did not immediately inform the Reliability Coordinator/Transmission Operator (RC/TO) of its inability to comply with a directive from the RC/TO on December 14, 2008, in violation of R3. Duration of violation was December 14, 2008 when the violation occurred.

Finding: TRE determined that the violation posed a moderate risk, but not a serious or substantial risk, to the bulk power system because the facility’s total operating capacity is 130 MW and the special protection systems operated as required to prevent a breaker trip. The NERC BOTCC also considered that this was SCW’s first violation of the particular standards at issue, SCW was cooperative, and there was no evidence of an attempt to conceal violations. The NERC BOTCC also found an aggravating factor in that a prior violation of COM-002-2 R1 by SCW’s affiliate, Stanton Wind Energy, LLC, stemmed from similar conduct that also involved real time conditions and failing to immediately follow directives from ERCOT.

Penalty: $45,000 (aggregate for multiple violations)

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

USACE-Portland District, FERC Docket No. NP10-2-000 (October 14, 2009)

Reliability Standard: TOP-001-1

Requirement: R3, R6, R7

Violation Risk Factor: High (R3, R6, R7)

Violation Severity Level: Not provided

Region: WECC

Issue: In June 2008, USACE-Portland District (USACE-PD) self-certified that although it had been taking directives from, forwarding information to, and giving emergency assistance to its Balancing Authority, there was no formal delegation agreement in place.

Finding: WECC found that the violations did not pose a serious or substantial risk to the bulk power system since USACE-PD had actually been performing the functions. The violations were primarily documentation issues and were USACE-PD's first violations of this Reliability Standard. Even though USACE-PD completed its mitigation plan 1.5 months late, no penalty was imposed.

Penalty: $0

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