NERC Case Notes: Reliability Standard TOP-004-1 | White & Case LLP International Law Firm, Global Law Practice
NERC Case Notes: Reliability Standard TOP-004-1

NERC Case Notes: Reliability Standard TOP-004-1

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

Reliability Standard: TOP-004-1

Requirement: 6

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: WECC

Issue: Arlington Valley, LLC – AVBA (Arlington Valley) self-certified, as a TOP, that it had not properly developed, maintained and enacted formal policies regarding transmission reliability with neighboring entities.

Finding: WECC found that the TOP-004-1 violation constituted a moderate risk to BPS reliability. In regards to the TOP-004-1 violation, the lack of adequate planning had the potential to negatively impact transmission reliability in the area. But, Arlington Valley only operates one 2.5-mile, 500 kV transmission line, which is not impacted by interconnected system flows and does not affect BPS system conditions as Arlington Valley's only contingency is the loss of the line. In addition, the operating limit of the Arlington Valley's transmission line is always known and the line cannot experience Interconnection Reliability Operating Limits or System Operating Limits. Arlington Valley's Reliability Coordinator and neighboring TOP did not notify Arlington Valley of any reliability concerns during the course of the violations. The duration of the TOP-004-1 violation was from November 5, 2007 through May 6, 2009. 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)

California Independent System Operator (CAISO), Docket No. NP13-56-000 (Sept. 30, 2013)

Reliability Standard: TOP-004-1

Requirement: R6

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: NERC

Issue: Pursuant to a Settlement Agreement entered into between the parties, CAISO was found to be in violation of multiple Reliability Standards with respect to a forced outage experienced by the Western Interconnection Bulk Electric System of the San Diego Gas & Electric (SDG&E) TL 50001 transmission line between SDG&E’s Imperial Valley and Miguel Substations, which was itself caused by a fire in a series capacitor bank. Among other violations, NERC found that CAISO violated TOP-004-1 R6 as it was responsible for SDG&E’s failure to develop, maintain, or implement procedures for switching TL 50001’s capacitor bank.

Finding: NERC found that this violation presented a serious or substantial risk to BPS reliability as SDG&E caused significant delays in switching the TL 50001 equipment at the time of the event as it relied on a switching procedure for a companion line to isolate the TL 50001 capacitor bank, which used language that was specific to the companion line, not TL 50001. In determining the appropriate penalty, NERC considered the following: (1) CAISO had not previously been subject to NERC Reliability Standards violations; (2) CAISO self-reported violations; (3) CAISO was cooperative in the enforcement process; (4) CAISO maintained a compliance program at the time of the event; (5) CAISO did not appear to hide or cover up any violation; and (6) CAISO voluntarily took additional mitigating activities which included significant investment to improve its operations and avoid future violations.

Total Penalty: $120,000 (aggregate for 6 violations)

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

City of Cleveland, Dept. of Public Utilities, Division of Cleveland Public Power, FERC Docket No. NP10-21-000 (December 30, 2009)

Reliability Standard: TOP-004-1

Requirement: R6

Violation Risk Factor: Medium

Violation Severity Level: Not provided

Region: RFC

Issue: Cleveland Public Power (CPP) did not document its policies for monitoring and controlling voltage levels and real and reactive power flows, switching of transmission elements, and planned outages of transmission elements as required by the rule.

Finding: Duration of violation was from June 18, 2007 when the standard became enforceable through March 19, 2009. In reaching a settlement penalty, RFC considered (1) CPP self-reported the violation; (2) CPP was cooperative throughout the enforcement process; and (3) CPP committed substantial financial and personnel resources, compared to its size, in order to achieve compliance with the standard.

Penalty: $160,000 (aggregate for multiple violations including several with high VRF)

FERC Order: Issued January 29, 2010 (no further review)

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

Reliability Standard: TOP-004-1

Requirement: R1, R2, R4

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. Prior to the emergency event, the uninterruptible power supply (“UPS”) units for two units at the Huntington generation plant were not in service, but had not been reported to be out of service. With the UPS units out of service, there was a greater risk that a fault could cause a voltage swing that would trips those generating units at the Huntington plant offline. But, this risk was not included in PacifiCorp’s contingency analysis and PacifiCorp did not change its operations accordingly (R2). PacifiCorp also did not modify its System Operating Limits (“SOLs”) and Interconnection Reliability Operating Limits (“IROLs”) to take into account offline UPS units (R1). As a result, PacifiCorp was operating the bulk power system for weeks in an unknown operating state (R4).

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-004-1 R1, PacifiCorp was operating outside its SOLs and IROLs since it did not take into account the offline UPS units. For the TOP-004-1 R2 violation, Enforcement and NERC determined that PacifiCorp, since it did not change its operating planning to account for the UPS units being offline, was not operating so that instability would not occur. In regards to the TOP-004-1 R4 violation, since PacifiCorp did not perform the necessary studies or otherwise validate or adjust its operations for the UPS units being offline, Enforcement and NERC found that PacifiCorp was operating in an unknown operating state for weeks (even though the Reliability Standards require operating limits to be restored within 30 minutes).

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

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

Public Service Company of New Mexico, FERC Docket No. NP10-158-000 (July 30, 2010)

Reliability Standard: TOP-004-1

Requirement: R6

Violation Risk Factor: Medium

Violation Severity Level: Not provided

Region: WECC

Issue: Public Service Company of New Mexico (PNM) self-reported that while it routinely communicates in both real-time and coordinated planning forums with nearby Transmission Operators regarding the requirements of R6, it did not have documented policies and procedures regarding such coordination. The non-compliance was self-reported prior to June 18, 2007, but PNM’s mitigation plan was not completed in a timely manner, so the violation became enforceable.

Finding: Duration of the violation was from June 18, 2007, when the Reliability Standard became enforceable, through April 25, 2008. The violation did not pose a serious or substantial risk to the reliability of the bulk power system because the violation consisted of a documentation issue. PNM received credit for self-reporting the violation and because it was PNM's first occurrence of violation of this Reliability Standard.

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

FERC Order: Issued August 27, 2010 (no further review)

Public Utility District No. 1 of Chelan County, FERC Docket No. NP10-2-000 (October 14, 2009)

Reliability Standard: TOP-004-1

Requirement: R6

Violation Risk Factor: Medium

Violation Severity Level: Not provided

Region: WECC

Issue: In July 2007, Public Utility District No.1 of Chelan County (CHPD) self-reported that it had not developed, maintained, and implemented formal policies and procedures concerning transmission reliability as required.

Finding: WECC found that this violation did not pose a serious or substantial risk to the bulk power system since the violation is primarily a documentation issue. CHPD had actually identified its most severe single contingency and notified its Reserve Sharing Group of that information. The violation was self-reported and was CHPD's first violation of this Reliability Standard. A mitigation plan has been completed.

Penalty: $0

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

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

Reliability Standard: TOP-004-1

Requirement: R4

Violation Risk Factor: High

Violation Severity Level: Severe

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 on 10:27 am on December 26, 2008, SMUD knew that ORV had inadequate DC battery voltage for the proper and reliable operation of its protective relays and control circuits, which placed the BPS in the vicinity of SMUD in an unknown operating state. SMUD, as a TOP, was required to return the BPS to a known operating state within 30 minutes, which it did not do. SMUD restored adequate protection system coverage to ORV and returned the BPS to a known operating state at 11:54 am.

Finding: NCEA found that the TOP-004-1 violation 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 SMUV). ORV is a networked substation and has MVA loading on its 230 kV lines and other relevant equipment at ORV. But, there was no actual impact to the BPS from this violation. 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-004-1 violation was 57 minutes during the course 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)

TransAlta Centralia Generation, LLC, FERC Docket No. NP10-2-000 (October 14, 2009)

Reliability Standard: TOP-004-1

Requirement: R1, R2, R4, R5, R6

Violation Risk Factor: High (R1, R2, R4, R5); Medium (R6)

Violation Severity Level: Not provided

Region: WECC

Issue: In May 2008, TransAlta Centralia Generation, LLC (TransAlta) self-reported that it did not have procedures in place to ensure: (R1) that it operated within the System Operating Limits; (R2) that the most severe single contingency would not lead to instability, uncontrolled separation, or cascading outages; (R4) that the Balancing Authority would restore operations within 30 minutes if TransAlta entered an unknown operating state; or (R5) that every effort would be made to remain connected to the Interconnection and that needed actions would be taken to protect its area. In addition, TransAlta self-reported that it had not developed, maintained, and implemented formal policies and procedures concerning transmission reliability as required by R6.

Finding: WECC found that the violations did not pose a serious or substantial risk to the bulk power system since TransAlta's Balancing Authority worked to guarantee that TransAlta would not cause instability, uncontrolled separation, or cascading outages as a result of its most severe single contingency and that TransAlta remained within its System Operating Limits (even though the agreement was not formalized). In addition, TransAlta would have worked with its Balancing Authority to restore operations in 30 minutes if it did enter an unknown state. TransAlta was also working with its Balancing Authority on remaining connected to the Interconnection and on taking the needed actions protect its area. Furthermore, TransAlta was working to guarantee transmission reliability in order to meet the requirements of TOP-004-1. All the violations, except R6, were primarily documentation issues. The violations were self-reported and were TransAlta’s first violations of this Reliability Standard. A mitigation plan has been completed.

Penalty: $0

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

Unidentified Registered Entity, FERC Docket No. NP11-128-000 (February 23, 2011)

Reliability Standard: TOP-004-1

Requirement: R6

Violation Risk Factor: Medium

Violation Severity Level: Not provided

Region: WECC

Issue: Unidentified Registered Entity (URE) self-reported a violation of R4, and upon review, WECC Enforcement determined URE lacked a universal interconnection agreement between WECC and the Balancing Authority.

Finding: The violation posed a moderate risk to the bulk power system because the likelihood of instability and uncontrolled separation from the grid increases without coordinated provisions for transmission reliability. In determining the penalty amount, the NERC Board of Trustees Compliance Committee considered the following factors: this was URE’s first occurrence of this type of violation; URE was cooperative; and the number and nature of the violations.

Penalty: $450,000 (aggregated for multiple violations)

FERC Order: Issued March 25, 2011 (no further review)

Utilities Commission of New Smyrna Beach, FERC Docket NP10-2-000 (October 14, 2009)

Reliability Standard: TOP-004-1

Requirement: R6

Violation Risk Factor: Medium

Violation Severity Level: Not provided

Region: FRCC

Issue: Utilities Commission of New Smyrna Beach's (New Smyrna) procedures did not state that it is required to jointly coordinate with other TOPs with regard to monitoring and controlling voltage levels and real and reactive power flow. Duration of the violation was from June 18, 2007 when the standard became enforceable through January 30, 2009.

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)