NERC Case Notes: Reliability Standard TOP-007-0 | White & Case LLP International Law Firm, Global Law Practice
NERC Case Notes: Reliability Standard TOP-007-0

NERC Case Notes: Reliability Standard TOP-007-0

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LG&E and KU Services Company as agent for Louisville Gas and Electric Company and Kentucky Utilities Company, Docket No. NP12-33 -000 (June 29, 2012)

Reliability Standard: TOP-007-0

Requirement: R1

Violation Risk Factor: High

Violation Severity Level: Severe

Region: SERC

Issue: LG&E and KU Services Company as agent for Louisville Gas and Electric Company and Kentucky Utilities Company (“LG&E & KU”) self-reported a violation of R1 because it failed to notify its RC when a System Operating Limit (“SOL”) was exceeded in a real-time contingency analysis. The issue arose during the construction of a new 138 kV Middletown-Collins transmission line, when LG&E & KU updated its Facility Rating Program, which resulted in an unplanned reduction in the Facility Rating of a transformer associated with the project. Due to the re-rating, LG&E & KU’s contingency analysis indicated that the Facility Rating of the transformer would be exceeded under a first contingency sceneraio. The RC’s SOL Methodology requires that SOLs are set to meet BPS performance for both pre-contingency and post-contingency states, which meant LG&E & KU should have informed the RC of its contingency analysis. SERC determined the duration of the violation was from July 22, 2010, the date the exceedence was discovered, to July 23, 2010, when the exceedence was remedied and LG&E & KU provided notice to the RC.

Finding: SERC determined the violations posed a moderate risk and did not pose a serious or substantial risk to the reliability of the BPS in part because although the violation could have limited the RC’s ability to evaluate and implement corrective actions in the event the relevant contingency occurred, the SOL was never actually exceeded in real time. Moreover, LG&E & KU had operating procedures in place and adequately experienced operators to react in the event such a contingency occurred. Finally, LG&E & KU promptly acted to remedy the exceedence.

Penalty: $75,000 (aggregate for 7 violations)

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

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

Reliability Standard: TOP-007-0

Requirement: R1, R2, R3

Violation Risk Factor: High (for R1, R2, R3)

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: (R1) to inform its Reliability Coordinator of situations when a System Operating Limit (SOL) had been exceeded and of the actions that had been taken to return the system to within its limits or (R2) to return, after a contingency or any other situations that resulted in an Interconnection Reliability Operating Limit (IROL) violation, its transmission system to within IROL in 30 minutes. In addition, TransAlta self-reported that it had not notified its Reliability Coordinator when a SOL had been exceeded and of the actions it took to return the system to within its limits.

Finding: WECC found that the violations did not pose a serious or substantial risk to the bulk power system since under an April 2000 agreement between TransAlta and its Balancing Authority, the Balancing Authority was actually informing TransAlta’s Reliability Coordinator when a SOL had been exceeded and the actions that were taken to return the system to within its limits. In addition, there are no IROLs in the Western Interconnection. The violations were primarily documentation issues. Also, 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)

Western Electricity Coordinating Council, FERC Docket No. NP11-259-000 (August 11, 2011)

Reliability Standard: TOP-007-0

Requirement: R4

Violation Risk Factor: High

Violation Severity Level: Severe

Region: NERC-Compliance Enforcement (NCEA)

Issue: On November 7, 2008, a fire at a key 500 kV line’s series capacitor bank at a substation caused a 500 KV line to undergo a forced scheduled outage, which caused a Category 2 disturbance. This outage caused excess stability and thermal System Operating Limits (SOLs) on two Western Interconnection transfer paths, which led to load shedding. In response, California-Mexico Reliability Coordinator (CMRC) and Rocky Mountain Desert Southwest Reliability Coordinator (RDRC), two of WECC’s predecessors, did not properly issue their directive to two Transmission Operators with sufficient specificity regarding the actions needed to address the excess SOLs.

Finding: NCEA and WECC entered into a settlement agreement to resolve multiple violations, whereby WECC agreed to pay a penalty of $100,000 and to undertake other mitigation measures. NCEA found that the TOP-007-0 violation constituted a moderate risk to bulk power system reliability. The events leading to the load shedding were not related to the Reliability Coordinators’ actions and load would still have needed to be shed even if the Reliability Coordinators took the required actions. But, decisive action by the Reliability Coordinators could have mitigated the results. The TOP-007-0 violation occurred on November 7, 2008. In approving the settlement agreement, NERC found that these were WECC’s first violations of the relevant Reliability Standards and WECC was cooperative during the enforcement process and did not conceal the violations. In addition, on February 14, 2008, another predecessor to WECC, Pacific Northwest Security Coordinator (PNSC), was involved in a separate event that led to a settlement for violations of, inter alia, Reliability Standards IRO-001-1 R3, IRO-005-1 R8 and COM-002-2 R2. NCEA evaluated the penalty, mitigation actions and preventative measures imposed in that settlement as part of this proceeding. WECC, which assumed the Reliability Coordinator role effective January 1, 2009, is responsible for the violations of its predecessors.

Penalty: $100,000 (aggregate for 4 violations)

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

Western Electricity Coordinating Council, FERC Docket No. NP14-38 (March 31, 2014)

Reliability Standard: TOP-007-0

Requirement: 4

Violation Risk Factor: High

Violation Severity Level: Severe

Region: NPCC

Issue: During a compliance audit, NPCC determined that, on several occasions, the Western Electricity Coordinating Council (WECC) did not identify when incorrect Interconnection Reliability Operating Limits (IROL) or System Operating Limits (SOL) were submitted by TOPs, which resulted in SOL violations.

Finding: NPCC found that the TOP-007-0 violation constituted a serious or substantial risk to BPS reliability. The lack of accurate data prevented WECC RC System Operator (RCSO) from making accurate determinations of possible IROL or SOL violations, which risks creating system conditions that would cause equipment failures. WECC was also unable to properly evaluate what actions needed to be taken and to direct the operators accordingly. In addition, if the ratings are lower than the design criterion, it may result in unnecessary customer outages. The duration of the TOP-007-0 violation was from September 18, 2009 through March 1, 2012. WECC neither admitted nor denied the violations. In approving the settlement agreement, NERC BOTCC considered the fact that most of the violations constituted a serious or substantial risk to BPS reliability and NPCC concluded that, left unaddressed, the number and type of reliability violations represented a potential for serious risk to the reliable operation of the Western Interconnection. The violations also represented WECC’s second occurrence of violations for Reliability Standards COM-002, TOP-007 and IRO-005 (although it was not evaluated as an aggravating factor since the prior violations involved legacy procedures used by WECC’s predecessor). Ten of the violations were self-reported, which was viewed as a mitigating factor. WECC was also cooperative throughout the enforcement process and did not conceal the violations.

Total Penalty: $400,000 (aggregate for 19 violations)

FERC Order: Issued August 28, 2014 (no further review)