NERC Case Notes: Reliability Standard VAR-002-1 | White & Case LLP International Law Firm, Global Law Practice
NERC Case Notes: Reliability Standard VAR-002-1

NERC Case Notes: Reliability Standard VAR-002-1

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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.

Alliant Energy – West, FERC Docket No. NP10-27-000 (December 30, 2009)

Reliability Standard: VAR-002-1

Requirement: R3.1

Violation Risk Factor: Medium

Violation Severity Level: Not provided

Region: MRO

Issue: On February 14, 2009, a Station Operator at Alliant Energy – West's (ALTW) Sutherland Generating Station reported to the General Dispatch Center (GDC) that the "Amplidyne" on Steam Unit #2 was being taken out of service and that the automatic voltage regulators (AVRs) would be manually controlled. As the GDC Operator did not understand "Amplidyne" to mean the AVR, he did not log the change or contact ALTW's Transmission Operator as required. ATLW self-reported its violation of VAR-002-1 for failing to notify its Transmission Operator within 30 minutes of the change in status of the AVR.

Finding: The violation occurred because the GDC Operator did not possess sufficient knowledge of voltage control equipment terminology. MRO found that this violation did not pose a serious risk to the bulk power system because Steam Unit #2 provided voltage regulation and represented just 30 MW out of the 140 MW online. Plus, the Transmission Operator would have been notified by real-time voltage monitoring alarms if the bandwidth fell outside the acceptable default voltage schedule. In addition, an analysis performed by ATLW under simulated conditions demonstrated that all of the fixed MVAR output levels for Steam Unit #2 were within system operating limits. MRO also found that ALTW did not conceal the violation, had no violation history for this standard, self-reported the problem and cooperated with the investigation, and had a strong internal compliance program. ATLW completed a mitigation plan that involved supplemental training focused on reinforcing knowledge of generator voltage regulation equipment and the communication required for operation of voltage control devices.

Penalty: $2,500

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

Ameren Union Electric, FERC Docket No. NP11-44-000 (November 30, 2010)

Reliability Standard: VAR-002-1

Requirement: R1, R3.1

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: SERC

Issue: Ameren Union Electric ("AUE") submitted a self-report for failing to notify its Transmission Operator ("TO") of a change in status of the Automatic Voltage Regulator at one of its plants within 30 minutes of the change.

Finding: NERC determined Deficiency Notice of Penalty treatment was appropriate in this case because the violation was minor in nature and the risk was minimal. This was an isolated incident, and the records demonstrated that the unit operators were aware the unit was in manual control mode and maintained voltage within the TO's specified range.

Penalty: $0

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

Ameren Energy Resources, FERC Docket No. NP11-42-000 (November 30, 2010)

Reliability Standard: VAR-002-1

Requirement: R1, R3.1

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: SERC

Issue: Ameren Energy Resources ("AER") submitted a self-report for failing to notify its Transmission Operator ("TO") of a change in status of the Automatic Voltage Regulator at one of its plants within 30 minutes of the change.

Finding: NERC determined Deficiency Notice of Penalty treatment was appropriate in this case because the violation was minor in nature and the risk was minimal. This was an isolated incident, and the records demonstrated that the unit operators were aware the unit was in manual control mode and maintained voltage within the TO's specified range.

Penalty: $0

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

Avista Corporation, FERC Docket No. NP10-26-000 (December 30, 2009)

Reliability Standard: VAR-002-1

Requirement: R1, R3

Violation Risk Factor: Medium

Violation Severity Level: Not provided

Region: WECC

Issue: On July 17, 2008, Avista took the AVR at its generation plant out of service for 12 minutes in order to investigate potential problems. But Avista, as a Generator Operator, did not notify the Transmission Operator that the AVR had been taken out of service. Avista self-reported this violation.

Finding: WECC found that the violation occurred from July 17, 2008 to September 9, 2008 (when Avista completed a mitigation plan). WECC and Avista entered into a Settlement Agreement to resolve all outstanding issues related to multiple violations of the Reliability Standards. The mitigation plan for the violation of VAR-002-1 involved updating training procedures. In imposing a penalty for multiple violations, WECC considered, in the aggregate, that this was one of the first enforcement proceedings to advance through WECC since the Reliability Standards became mandatory, some of the violations were self-reported, Avista was cooperative during the enforcement process, and Avista did not have any prior violations of the Reliability Standards. In addition, since the Avista system is surrounded by the Bonneville Power Administration system, there was no serious or substantial risk to the bulk power system.

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

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

Board of Public Utilities, City of McPherson, Kansas, FERC Docket No. NP10-123-000 (July 6, 2010)

Reliability Standard: VAR-002-1

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: Moderate

Region: SPP

Issue: In July 2009, the Board of Public Utilities, City of McPherson, Kansas (McPherson) self-reported that on June 18 and 19, 2009 its generator operator switched, for approximately two minutes on each day, the PP2 Unit 1 generator from AVR to MVAR control mode. McPherson’s generator operator did not alert the Transmission Operator (Westar) of the switch. The switch occurred during the startup of PP2 Unit 1 in order to make the unit more responsive to control system changes at low load.

Finding: SPP found that the violation did not constitute a serious or substantial risk to the bulk power system since during the time when the PP2 Unit 1 was not operating in AVR control mode, McPherson had other generating unit(s) operating in AVR control mode that could have responded to a bulk power system voltage excursion. In addition, PP2 Unit 1 is a small generating unit (only 52 MW) and was only unable to respond to system voltage executions for two minutes on each of those days. The duration of the violation was from June 18, 2009 through July 10, 2009. Furthermore, this was McPherson’s first violation of the Reliability Standards; McPherson was cooperative during the enforcement process and did not attempt to conceal the violation; McPherson has a positive compliance program in place; and there were no additional aggravating or mitigating factors.

Penalty: $0

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

Calpine Energy Services, FERC Docket No. NP11-152-000 (March 30, 2011)

Reliability Standard: VAR-002-1

Requirement: R1

Violation Risk Factor: Medium

Violation Severity Level: Moderate

Region: MRO

Issue: Calpine Energy Services (CES) self-reported that certain of its generator units were synchronized to the grid with the Automatic Voltage Regulator system in Automatic VAR Control mode rather than Automatic Voltage Control mode. Duration of violation was August 2, 2007, when the Standard became enforceable, through April 27, 2009 when the violation was mitigated.

Finding: MRO Enforcement determined that the violation did not pose a serious or substantial risk to the bulk power system because the generators were only operational for about 30% of the time during the violation period, and no instability was reported during that period. Further, the NERC BOTCC concluded the penalty appropriate because this was CES’ first violation of the Standard involved, CES self-reported the violation, and CES was cooperative during the investigation.

Penalty: $4,000

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

CAMS-Mackinaw Power (CAMS-Mack), Docket No. NP13-12-000 (December 31, 2012)

Reliability Standard: VAR-002-1

Requirement: 1

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: SERC

Issue: CAMS-Mack self-reported a violation of VAR-002-1 R1 occurring at its Effingham County Power facility on February 9, 2011 when an automatic voltage regulator (AVR) of a steam turbine was discovered operating in MVAR control mode rather than voltage control mode. CAMS-Mack notified the appropriate TOP once it discovered the error. The AVR for Effingham’s steam turbine unit controls reactive power when the mode selector switch (MSS) is switched “In-Service,” and controls voltage when in the “Out-of-Service” position. The operator erred in setting the MSS to “In-Service,” where the AVR controls reactive power, not voltage. After the steam turbine representative confirmed that the AVR was controlling reactive power, CAMS-Mack notified the TOP and contacted the managers of its other plants to confirm that no other AVRs were operating in voltage control mode. CAMS-Mack reset the Effington steam turbine AVR to automatic voltage control mode during the next unit startup. Although the steam turbine unit was controlling reactive power, it still met its voltage schedule.

Finding: SERC determined that the issue posed a minimal risk and did not pose a serious or substantial risk to the bulk power system. Although CAMS-Mack violated VAR-002-1 R1 by operating a generator in a mode other than automatic voltage control mode without having notified the TOP, two other combustion turbine units at the facility were controlling the bus voltage in automatic voltage control mode, and the facility maintained the prescribed voltage schedule despite the violation. In determining the appropriate penalty and approving the settlement agreement, SERC considered CAMS-Mack’s internal compliance program (ICP), which is available to all employees and describes the roles and responsibilities of employees in complying with NERC’s Standards. The ICP details formal disciplinary procedures and is carried out by the Regulatory Compliance Manager (RCM) who has independent access to senior officers and managers.

Total Penalty: $0

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

City of Burbank Water and Power, FERC Docket No. NP10-107-000 (June 2, 2010)

Reliability Standard: VAR-002-1

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: Not provided

Region: WECC

Issue: The City of Burbank Water and Power (BURB) did not inform its Transmission Operator of the status of its Lake 1 46 MW CT PSS within 30 minutes of an outage.

Finding: The duration of the alleged violations of CIP-001-1 R1 through R3 was from June 18, 2007, the date the Standards became enforceable, until June 29, 2009 when BURB completed its Mitigation Plan. WECC assessed a penalty of $44,500 for these and other alleged violations. In assessing this penalty, WECC considered these factors: (1) the alleged violations were BURB’s first occurrence of non-compliance with these NERC Reliability Standards; (2) the alleged violation of VAR-002-1 and other NERC Reliability Standards were self-reported after notification of upcoming off-site compliance audits; (3) BURB cooperated during the compliance enforcement process; (4) there was no attempt to conceal a violation or evidence of intent to do so; and (5) the violations did not pose a serious or substantial risk to the reliability of the bulk power system.

Penalty: $44,500 (aggregate for multiple violations)

FERC Order: Issued July 2, 2010 (no further review)

City of Santa Clara d/b/a Silicon Valley Power, FERC Docket No. NP11-130-000 (February 28, 2011)

Reliability Standard: VAR-002-1

Requirement: R1, R2

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: WECC

Issue: During an off-site compliance audit, Silicon Valley Power (SVP) could not provide documentation that it operated in automatic voltage control mode nor that it had notified its Transmission Operators of the method by which it operates as required by R1. SVP also failed to provide evidence either that it maintained generator voltage or reactive power output as directed by its Transmission Operators or that it had received an exemption, as required by R2. Duration of violations was August 2, 2007, when the Standard became enforceable, through December 16, 2008, when the violations were mitigated.

Finding: WECC Enforcement determined that the violations did not pose a serious or substantial risk to the bulk power system because SVP operated in automatic voltage control mode, even though it could not provide evidence of such in the audit, and because it had maintained its generator voltage or reactive power output per R2. Further, the NERC BOTCC concluded the penalty appropriate because this was SVP’s first violation of the Standard, about half of the aggregate violations found were documentation issues, and SVP was cooperative during the investigation.

Penalty: $94,000 (aggregate for multiple violations)

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

Covanta Mid-Conn Inc., Docket No. NP12-18 (February 29, 2012)

Reliability Standard: VAR-002-1

Requirement: R1, R3

Violation Risk Factor: Medium (R1, R3)

Violation Severity Level: High (R1); Lower (R3)

Region: NPCC

Issue: Covanta, a GOP submitted a self-report detailing a violation of VAR-002-1 R1 and R3. Covanta reported that an Automatic Voltage Regulator (AVR) was not operating in automatic voltage control mode but was in DC control mode. Covanta operators believed that DC mode would automatically control voltage. Upon further review, Covanta found that the AVR DC mode only controlled field voltage and not terminal voltage (R1). Covanta did not inform its TOP within 30 minutes of a change in AVR status as required by the Standard (R3).

Finding: NPCC determined the violation posed a minimal risk to BPS reliability because even though the unit was not operated in automatic voltage control mode, voltage was maintained within an acceptable range during the period that the unit was operated in DC control mode. Also, the relevant unit is a 45 MVA unit, connected to the 115 kV system and has minimal impact on voltage control in the area. Covanta’s compliance program was considered a neutral factor in determining the appropriate penalty.

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

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

The Detroit Edison Company, FERC Docket No. NP11-162-000 (March 31, 2011)

Reliability Standard: VAR-002-1

Requirement: R3.1

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: RFC

Issue: The Detroit Edison Company (Detroit Edison) self-reported that, on November 26, 2009, operating personnel at its St. Clair Power Plant, in response to fluctuations on the DC field amps and AC outputs, placed the voltage regulators for Unit 6 into manual mode, but failed to notify Detroit Edison’s System Operations Center until November 30, 2009. Therefore, Detroit Edison’s System Operations Center was unable to notify its Transmission Operator within 30 minutes of the relevant voltage regulator being placed into manual mode as required.

Finding: Detroit Edison agreed to pay a penalty of $5,000 and to undertake other mitigation measures to resolve the violation. RFC found that the violation only posed a minimal risk to bulk power system reliability since Unit 6 had a common interconnection point with Unit 7 at the St. Clair Power Plant, which provides for Unit 7 to compensate for any voltage variations coming from Unit 6. Unit 7 remained in automatic mode the entire time of the violation. The duration of the violation was from November 26, 2009 through November 30, 2009.

Penalty: $5,000

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

Duke Energy Corporation, FERC Docket No. NP11-171-000 (April 29, 2011)

Reliability Standard: VAR-002-1

Requirement: R1, R3

Violation Risk Factor: Medium

Violation Severity Level: Lower (R1), Moderate (R3)

Region: RFC

Issue: Duke Energy Corporation (“Duke”) self-reported violation of R1 because on ten occasions it did not operate its generating units at Wabash River and Edwardsport generating stations in automatic voltage (“AV”) mode, and on twelve occasions did not operate generating units at W.C. Beckjord in AV mode. In addition, Duke failed to notify its Transmission Operator (“TO”) that the AV regulator was not in service during all but one of these instances. Further, Duke violated R3 because it did not notify its TO within 30 minutes that its AV regulator at W.H. Zimmer generating station Unit #1 tripped offline and that its power system stabilizer at Fayette generating station was disabled for 221 hours of operation.

Finding: RFC determined the violations posed a moderate risk to the bulk power system because Duke manually controlled voltage in each instance the units were not operated in AV mode. This allowed Duke to maintain appropriate voltage profiles and follow its voltage schedules but diminished its capacity to respond to potential system disturbances. The NERC BOTCC considered the following factors: Duke self-reported the violations; this was Duke’s first violation of VAR-002-1 R1 at Wabash River and Edwardsport, and of the first 10 violations at W.C. Beckjord, but the other violations were considered repeat violations; Duke was cooperative; Duke had a compliance procedure in place, which RFC considered a mitigating factor; there was no evidence of any attempt or intent to conceal the violations; and there were no other mitigating or aggravating factors.

Penalty: $60,000

FERC Order: Issued May 27, 2011 (no further review)

Dunkirk Power, LLC, FERC Docket No. NP10-101-000 (April 28, 2010)

Reliability Standard: VAR-002-1

Requirement: R3.1

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: NPCC

Issue: Dunkirk Power, LLC (Dunkirk) failed to notify its transmission operator within the required 30-minute limit for a status or capability change of each automatic voltage regulator (AVR).

Finding: The duration of the alleged violation was January 16, 2008, the date the AVR was removed from service, through January 17, 2008, 12 hours later, when Dunkirk notified its transmission operator of the change in its AVR status. NPCC imposed a $2,000 penalty for the violation, considering that Dunkirk reported the alleged violation after it received a notice of an upcoming "Spot Check" by NPCC; it was Dunkirk's first alleged violation of NERC Reliability Standards; Dunkirk was cooperative during the compliance enforcement process and did not attempt to conceal the violation or intend to do so; and NPCC found that the alleged violation did not create a serious or substantial risk to the bulk power system.

Penalty: $2,000

FERC Order: Issued May 28, 2010 (no further review)

Dynegy, Inc., FERC Docket No. NP09-16-000 (March 31, 2009)

Reliability Standard: VAR-002-1

Requirement: R2

Violation Risk Factor: Medium

Violation Severity Level: Minimal

Region: SERC

Issue: Dynegy self-reported two possible violations of VAR-002-1 "for failure to maintain the hourly integrated voltage value of the specified unit with the voltage specified by the Transmission Operator for the relevant hour, and calculating whether the generator voltage was within the limits specified by the Transmission Operator." Dynegy promptly implemented a mitigation plan to prevent the recurrence of the violations at the individual plants where the violations happened.

Finding: No penalty was assessed since the violations occurred during the initial implementation period to mandatory standards and Dynegy self-reported the violations and cooperated with SERC. These deviations were only approximately one percent or less out of the specified tolerance and were short, isolated instances that occurred during the start-up of the units. As these were relatively minor infractions, they did not put the bulk power system reliability at a serious or substantial risk.

Penalty: $0

FERC Order: Issued April 30, 2009 (no further review)

Dynegy Inc., FERC Docket No. NP10-2-000 (October 14, 2009)

Reliability Standard: VAR-002-1

Requirement: R2

Violation Risk Factor: Medium

Violation Severity Level: Not provided

Region: WECC

Issue: On October 24, 2007 from 9:00 pm to 10:00 pm, Dynegy Inc. operated its hourly integrated Morro Bay transmission bus voltage outside of the Transmission Owner's specified voltage scheduled range by .4 kV.

Finding: WECC found that this violation did not involve a serious or substantial risk to bulk power system reliability since the amount outside of the voltage range was minimal (only .4 kV) and the incident only lasted one hour. In addition, PG&E, the Transmission Owner, did not notify the Plant of any voltage programs during the time when the Morro Bay transmission bus voltage was outside the specified range. Dynegy Inc. self-reported the violation; this was Dynegy Inc.'s first violation of this Reliability Standard; and Dynegy Inc. completed a mitigation plan.

Penalty: $0

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

Dynegy Inc., FERC Docket No. NP10-144-000 (July 30, 2010)

Reliability Standard: VAR-002-1

Requirement: R2

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: WECC

Issue: In July 2009, Dynegy Inc. (Dynegy) self-reported that for a period of one hour on June 29, 2009 its Moss Landing Plant did not maintain the Unit 2 generator terminal voltage as required by Pacific Gas and Electric Company's schedule.

Finding: WECC and Dynegy entered into a settlement agreement to resolve the alleged violation, whereby Dynegy neither admitted nor denied the violation but agreed to pay a penalty of $20,000 and to undertake other mitigation measures. WECC found that the alleged violation did not create a serious or substantial risk to bulk power system reliability since the alleged violation only caused a minor deviation of 0.5 kV for one hour and the generator terminal voltage was still within the daily range for the system. Furthermore, NERC considered the fact that the alleged violation was a repeat violation of VAR-002-1 R2; the alleged violation was self-reported; Dynegy was cooperative during the enforcement process and did not attempt to conceal the alleged violation; Dynegy had a positive compliance program; and there were no additional mitigating or aggravating factors.

Penalty: $20,000

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

Edison Mission Marketing & Trading, Inc., FERC Docket No. NP10-166-000 (September 30, 2010)

Reliability Standard: VAR-002-1

Requirement: R3, R3.2

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: WECC

Issue: Edison Mission Marketing & Trading, Inc. (EMMT), as a Generator Operator, failed to notify its Transmission Operator within 30 minutes that the capacity of its generator Reactive Power resource had changed after the dynamic voltage ampere reactive unit at EMMT’s Mountain Wind II (MWII) facility tripped off-line.

Finding: The alleged violation occurred from May 20, 2009, when the generation capacity of EMMT’s MWII changed, until June 10, 2009. WECC imposed a $1,000 penalty for this violation. In assessing the penalty, WECC determined that the alleged violation did not create a serious or substantial risk to the bulk power system. Even though EMMT did not notify the Transmission Operator of the change in MVAR capacity, it was not a total loss of Reactive Power, but only 50% of a relatively small MVAR capacity. In addition, the total change of 2 MVAR for 20 days reflects a minimal impact to the bulk power system.

Penalty: $1,000

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

E.ON U.S. Services Inc., FERC Docket No. NP10-120-000 (July 6, 2010)

Reliability Standard: VAR-002-1

Requirement: R2

Violation Risk Factor: Medium

Violation Severity Level: High

Region: SERC

Issue: In October 2008, E.ON U.S. Services Inc. (E.ON), as a Generator Owner and Generator Operator, self-reported that it did not have sufficient documentation demonstrating that it had controlled its generator voltage and reactive output in order to meet the voltage or Reactive Power schedule provided by its Transmission Operator. E.ON had also not alerted its Transmission Operator that it would not meet the voltage schedule or received an exemption from the voltage schedule from its Transmission Operator. In addition, E.ON determined that there were times when several of its units were inadvertently operating outside the voltage tolerance bandwidth (without adequate alarming capability to notify the operator) and that it did not have available reliable integrated hourly information in order to receive real-time voltage measurements for the proper operator long entries.

Finding: E.ON and SERC entered into a settlement agreement to resolve multiple alleged violations, whereby E.ON neither admitted nor denied the violations but agreed to pay a penalty of $115,000 and to undertake other mitigation measures. SERC found that the alleged violation of VAR-002-1 did not constitute a serious or substantial risk to bulk power system reliability since E.ON only operated outside the voltage schedule tolerance band in less than 1% of the total unit operating hours and this affected only eight of E.ON’s twelve generating plants. The duration of the VAR-002-1 alleged violation was from August 11, 2007 through May 29, 2009. In determining the penalty amount, SERC also considered the fact that these alleged violations were E.ON’s first violations of the relevant Reliability Standards; the alleged violations were self-reported; E.ON was cooperative during the enforcement process and did not conceal the alleged violations; E.ON had a compliance program in place; and there were no additional aggravating or mitigating factors.

Penalty: $115,000 (aggregate for multiple violations)

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

Exelon Generation Company, LLC – Exelon Nuclear, FERC Docket No. NP10-114-000 (June 2, 2010)

Reliability Standard: VAR-002-1

Requirement: R1

Violation Risk Factor: Medium

Violation Severity Level: Not provided for R1 (Exelon Generation Company, LLC – Exelon Nuclear (Exelon Nuclear) initially reported a violation of R3.1, which has a Violation Severity Level of High)

Region: RFC

Issue: In January 2009, Exelon Generation Company, LLC – Exelon Nuclear (Exelon Nuclear) self-reported that, on November 28, 2008, it did not notify its Transmission Operator when it took its Automatic Voltage Regulator (AVR) equipment located at Three Mile Island out of automatic voltage control for a brief period of time in order to perform testing. In addition, Exelon Nuclear, after an investigation, identified eight other instances in which it did not timely notify its Transmission Operator when its AVR equipment was taken out of automatic voltage control mode.

Finding: Exelon Nuclear and RFC entered into a settlement agreement to resolve the alleged violation, whereby Exelon Nuclear neither admitted nor denied the violation but agreed to pay a penalty of $10,000 and to undertake other mitigation measures. RFC found that this violation did not create a serious or substantial risk to the bulk power system since for all but one of the incidents, the AVR was only placed in manual mode for a limited amount of time and Exelon Nuclear was still monitoring and controlling the AVR. For the one instance where the AVR was placed in manual mode for a long time period (133 hours, 43 minutes), Exelon Nuclear was engaged in communications with its Transmission Operator and was still maintaining the appropriate voltage schedule. In all cases, Exelon Nuclear was dealing with fluctuations in VAR swings or was performing voltage relay tests (such that the AVR equipment was only in manual mode for ten minutes to order to ensure operability of the manual regulator and the relay used for the transfer between automatic and manual). In assessing the penalty, RFC considered the fact that this was Exelon Nuclear's first violation of this Reliability Standard; the violation was self-reported; Exelon Nuclear was cooperative during the enforcement process and did not conceal the alleged violation; and Exelon Nuclear has a positive compliance program. A mitigation plan has been completed.

Penalty: $10,000

FERC Order: Issued July 2, 2010 (no further review)

Frederickson Power LP, FERC Docket No. NP12-12 (January 31, 2012)

Reliability Standard: VAR-002-1

Requirement: R1

Violation Risk Factor: Medium

Violation Severity Level: Moderate

Region: WECC

Issue: In response to a notice by WECC that it was beginning the Self-Certification process for the time period July 1, 2010 through August 31, 2010, Frederickson Power (FP), a GOP, submitted a notice of non-compliance with the Standard explaining that its Combustion Turbine Generator (CTG) was not operating in the correct Automatic Voltage Regulator (AVR) mode. The CTG should have been in Voltage Control mode, but was in VAR (constant reactive power output) mode instead from August 2, 2007 until January 12, 2011, when the CTG went offline. The AVR computer interface correctly should be in the “OFF” mode in order for the unit to be in the proper operating mode; however, plant personnel incorrectly believed “OFF” took the unit offline, and so it was operated in VAR mode rather than Voltage Control/OFF mode.

Finding: The violation posed only a minimal risk to BPS reliability because even though the CTG was operating in an incorrect mode, FP’s Steam Turbine Generator was always in the correct Voltage Control mode, which lessened any risk to the BPS. Also, the output of the plant was in acceptable operating parameters as defined by its TOP. Also, plant personnel followed all orders given by the TOP when voltage schedule deviations were needed. WECC considered the following in determining the appropriate

Penalty: FP had no repeat violations of this Standard and no relevant negative compliance history. FP did not fail to complete any compliance orders. And, WECC found no evidence of any attempt to conceal the violation, or any evidence that FP’s violation was intentional.

Penalty: $1,000 (aggregate for two violations)

FERC Order: Order issued March 1, 2012 (no further review)

Hermiston Generating Co., L.P., FERC Docket No. NP10-133-000 (July 6, 2010)

Reliability Standard: VAR-002-1

Requirement: R1, R3

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: WECC

Issue: Hermiston Generating Co., L.P. (HERM) failed to notify its Transmission Operator that it was operating its automatic voltage regulator (AVR) in manual voltage control mode, and it did not notify its Transmission Operator, within 30 minutes, after the status of its AVR had changed.

Finding: The alleged violations occurred from July 4, 2009, when HERM controlled its voltage manually without notifying its Transmission Operator, until August 22, 2009. WECC imposed a $59,500 penalty for these and other alleged violations. In assessing the penalty, WECC considered these factors: this was HERM's first alleged violations of the Reliability Standards; HERM cooperated during the compliance enforcement process; HERM did not attempt to conceal the violations or intend to do so; the Violation Severity Levels and Violation Risk Factors, the durations of the violations, the lack of aggravating factors that would justify a higher penalty, and WECC found that the alleged violations did not create a serious or substantial risk to the bulk power system.

Penalty: $59,500 (aggregate for multiple violations)

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

Hetch Hetchy Water and Power, FERC Docket No. NP10-189-000 (September 30, 2010)

Reliability Standard: VAR-002-1

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: Moderate

Region: WECC

Issue: Hetch Hetchy self-reported that it failed to notify its Transmission Operator of a change in the status of its power system stabilizer (PSS), or that a PSS at one of its facilities was not operating, within thirty minutes as required by the standard.

Finding: It was determined by WECC that the violation did not constitute a serious or substantial risk to the bulk power system because Hetch Hetchy had returned the PSS to service within one day and it did eventually inform its Transmission Operator of the events. The duration of the violation was from November 8, 2009 through December 9, 2009. Additional factors for the penalty determination included that the violation was the first violation of this Reliability Standard and that Hetch Hetchy self-reported the violation.

Penalty: $4,000

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

Huntley Power, LLC, FERC Docket No. NP10-102-000 (April 28, 2010)

Reliability Standard: VAR-002-1

Requirement: R3.1

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: NPCC

Issue: Huntley Power, LLC (Huntley) personnel on two occasions failed to notify its transmission operator within the required 30-minute time interval when it restored the unit automatic voltage regulator (AVR) to service.

Finding: The first alleged violation occurred from February 12, 2008, the date the AVR was returned to service, through February 14, 2008, 30 hours later, when Huntley notified its transmission operator of the change in its AVR status. The second alleged violation occurred from November 6, 2008, the date the AVR could not be returned to service, until November 7, 2008, 12 hours later, when Huntley notified its transmission operator of the change in its AVR status. NPCC imposed a $9,500 penalty for the alleged violations, considering that Huntley reported the alleged violations after receiving a notice of an upcoming “Spot Check” by NPCC; they were Huntley’s first alleged violations of NERC Reliability Standards and both violations related to the same standard; Huntley was cooperative during the compliance enforcement process and did not attempt to conceal the violations or intend to do so; and the alleged violations did not create a serious or substantial risk to the bulk power system.

Penalty: $9,500

FERC Order: Issued May 28, 2010 (no further review)

Indianapolis Power & Light Company, FERC Docket No. NP11-165-000 (April 29, 2011)

Reliability Standard: VAR-002-1

Requirement: R2, R3

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: RFC

Issue: In November 2009, Indianapolis Power & Light Company (IPL), a Generator Owner and Operator, self-reported that it had not alerted its Transmission Operator within 30 minutes of switching the status of the Automatic Voltage Regulator (AVR) at one of the Harding Street generating units as required (R3.1). IPL has 23 generating units. Subsequently, RFC discovered that IPL had not maintained its voltage schedules on three instances between October and November 2009 (R2.1).

Finding: RFC and IPL entered into a settlement agreement to resolve multiple violations, whereby IPL agreed to pay a penalty of $30,000 and to undertake other mitigation measures. RFC determined that the violations of VAR-002-1 constituted a moderate risk to bulk power system reliability. While all of UPL’s generating units that are greater than 200 MW have an automated alarm that will trigger if the AVR status changes, the relevant unit is only 100 MW and therefore did not have an automated alarm to prompt IPL to notify the Transmission Operator of the change in status. But, the size of the generating unit also made it unlikely that any voltage excursion would cause a system event. In additional, during the time when the voltage was being manually controlled, the unit was not directed by the Transmission Operator to modify its voltage. The duration of the VAR-002-1 violations was from October 28, 2009 through November 10, 2009. In approving the settlement agreement and the penalty determination, NERC considered the fact that these violations were IPL’s first violations of the relevant Reliability Standards; some of the violations were self-reported (which led to the full review); IPL was cooperative during the enforcement process and did not conceal the violations; IPL had a compliance program in place (which was evaluated as a mitigating factor); and there were no additional aggravating or mitigating factors.

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

FERC Order: Issued May 27, 2011 (no further review)

Indianapolis Power & Light Company, FERC Docket No. NP14-7 (November 27, 2013)

Reliability Standard: VAR-002-1

Requirement: 1

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: RFC

Issue: During a February 2013 compliance audit, RFC determined that Indianapolis Power & Light Company (IPL) did not operate its four Eagle Valley peaking units in automatic voltage control mode and IPL had not notified the TOP of this operating status. The Eagle Valley units (which have a total generating capacity of 333 MW) do not have the equipment for automatic voltage control.

Finding: RFC found that the violation only constituted a minimal risk to BPS reliability as the Eagle Valley units are peaking units that do not run continuously. In addition, Eagle Valley is electrically close to large base load units and those large base load units have a greater impact on controlling the transmission system voltage than does Eagle Valley. There were also no issues with Eagle Valley’s voltage and reactive output. The VAR-002-1 R1 violation started on August 2, 2007 and is ongoing. IPL admitted the violations. In approving the settlement agreement, NERC BOTCC considered the fact that IPL had a repeat violation of TOP-002-2 R11 and that issues with next-day planning were a contributing cause to the September 8, 2011 outage in the Pacific Southwest. But, as mitigating factors, IPL did have a compliance program in place, spent significant amounts of money and human resources under its TOP-002-2 R11 mitigation plan and voluntarily added eight phasor measurement units, which improved the reliability of its system. IPL also did not conceal the violations.

Total Penalty: $30,000 (aggregate for 2 violations)

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

Judith Gap Energy LLC, FERC Docket No. NP10-2-000 (October 14, 2009)

Reliability Standard: VAR-002-1

Requirement: R1

Violation Risk Factor: Medium

Violation Severity Level: Not provided

Region: WECC

Issue: In July 2008, Judith Gap Energy LLC (JUGE) self-certified that it had not notified its Transmission Operator when its automatic voltage regulator (AVR) was operating in Power Factor Control mode. JUGE did not have a general policy to operate its generators with the AVR in service and in voltage control mode, unless requested to operate the generating units otherwise.

Finding: WECC found that the violation did not pose a serious or substantial risk to the bulk power system due to the nature (i.e., wind) and location of JUGE's facilities. This was JUGE's first violation of this Reliability Standard. A mitigation plan has been completed.

Penalty: $0

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

Kern River Cogeneration Company, FERC Docket No. NP10-165-000 (September 30, 2010)

Reliability Standard: VAR-002-1

Requirement: R3, R3.1

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: WECC

Issue: Kern River Cogeneration Company (KRCC) did not notify its Transmission Operator within 30 minutes of taking its automatic voltage regulator (AVR) out of service.

Finding: WECC imposed a $1,000 penalty for this violation. In assessing the penalty, SERC considered the following factors: this was KRCC’s first alleged violation of this Standard; the violation was self-reported; KRCC cooperated during the compliance enforcement process; KRCC did not attempt to conceal the violations or intend to do so; the alleged violation did not create a serious or substantial risk to the bulk power system; and there were no aggravating factors that would impact the penalty assessment.

Penalty: $1,000

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

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: VAR-002-1

Requirement: R1, R3

Violation Risk Factor: Medium

Violation Severity Level: Lower

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 violations of R1 and R3, which were discovered while LG&E & KU were investigating a potential violation of a different Reliability Standard. Specifically, LG&E & KU reported that it was in violation of R1 because it operated the automatic voltage regulator (“AVR”) of six of its 45 generators in the automatic reactive power mode instead of automatic voltage control mode without notifying the TOP. The duration of the violation was from August 2, 2007, the date the Standard became applicable, to August 17, 2010, when the violation was mitigated. LG&E & KU reported a violation of R3 because one generator that was originally built without AVR capability was retrofitted with an AVR and the TOP was not notified of the change within 30 minutes. The duration of the violation was from January 12, 2008, when the AVR was placed in service, until July 28, 2010, when the TOP was notified of the change.

Finding: SERC determined the violations posed a minimal risk and did not pose a serious or substantial risk to the reliability of the BPS in part because two of the generators at issue in the violation of R1, with a total capacity of only 26 MW, and the generator at issue in the violation of R3, with a capacity of only 13 MW, were hydro generators that are exempted by the TOP from the voltage schedule. Accordingly, the TOP has no expectation of such generator responses to transient events that would require the AVR to respond. In addition, the violation of R1 involved AVRs that were operating in an automatic mode and were reactivating automatically to system conditions and maintained their voltage schedules throughout the duration of the violation. The generators at issue in the violation of R1 are also peaking units that are only used during peaking conditions.

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

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

Louisiana Generating LLC, FERC Docket No. NP09-28-000 (July 10, 2009)

Reliability Standard: VAR-002-1

Requirement: R1, R3.1

Violation Risk Factor: Medium (for both R1 and R3.1)

Violation Severity Level: Not provided

Region: SERC

Issue: On April 2, 2008, Louisiana Generating LLC (LaGen) personnel were cleaning the rheostat at the Cajun 2 Unit 2 generating facility and took the automatic voltage regulator (AVR) out service for 11 minutes. Under VAR-002-01 R1, LaGen is required to operate each generator that is connected to the interconnected transmission system in automatic voltage control mode unless the Generator Operator has notified the Transmission Operator. R3.1 requires LaGen to notify its Transmission Operator within 30 minutes if there is a change in status of any AVR or power system stabilizer and the expected duration of this change in status or capability. The LaGen plant operators did not immediately notify the Transmission Operator, the Reliability Coordinator or LaGen management when this AVR was off-line. In addition, the LaGen System Operator did not contact the Transmission Operator or the Reliability Coordinator until over three hours after the equipment outage had occurred.

Finding: LaGen and SERC entered into a settlement agreement where LaGen neither admitted nor denied the alleged violations, but agreed to pay a penalty and undertake actions to prevent recurrence of the violations and to promote prospective compliance. In reaching the penalty amount, SERC considered the fact that LaGen had no prior violations of this standard and this was an isolated, individual failure that had minimal impact. In addition, the failure to notify the Transmission Operator within 30 minutes did not put the bulk power system reliability at substantial risk because it was an isolated incident of extremely short duration. Plus, LaGen timely self-reported the problem, cooperated with SERC's Compliance Enforcement Staff, and promptly established and completed a mitigation plan.

Penalty: $10,000

FERC Order: Issued August 7, 2009 (no further review)

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

Reliability Standard: VAR-002-1

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: WECC

Issue: In April 2010, Mesquite Power LLC (Mesquite), as a GOP, self-reported that one of its gas turbine tripped offline on October 6, 2009, remaining offline for trouble shooting, and that the power system stabilizer (PSS) of that turbine switched off of automatic mode (which sounded an alarm). An operator acknowledged the alarm, but did not return the PSS to automatic mode or inform the TOP of the status change. After the gas turbine was restarted and synched to the grid, the TOP called the Mesquite control room and notified the operator that the PSS was not in automatic mode, whereby the operator promptly returned the PSS to automatic mode. Mesquite did not notify its TOP within 30 minutes of a status change to its PSS or provide the expected duration of the change in status.

Finding: WECC found that the VAR-002-1 violation only constituted a minimal risk to BPS reliability because the automatic voltage regulator was on and in automatic mode during the course of the violation. Mesquite’s voltage and frequency did not fluctuate outside of acceptable norms and there was no transient instability during the violation. The PSS was placed back into automatic mode immediately after the operator was notified. In addition, the relevant gas turbine represented only 175 MW out of Mesquite’s total capacity of 1250 MW. The duration of the VAR-002-1 violation was for four hours and three minutes on October 6, 2009 and October 7, 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)

Midland Cogeneration Venture, Limited Partnership, Docket No. NP11-270 (September 30, 2011)

Reliability Standard: VAR-002-1

Requirement: R2, R3

Violation Risk Factor: Medium

Violation Severity Level: Lower (R2); Severe (R3)

Region: RFC

Issue: During a compliance audit, RFC determined that Midland Cogeneration Venture, Limited Partnership (Midland) violated R2 because it failed to maintain the generator schedule directed by its TOP. During the violation period, 75% of Midland’s generators were offline, and consequently its voltage remained approximately 3 kV lower than that directed by the TOP. Prior to the compliance audit, Midland self-reported a violation of R3 and RFC determined that Midland failed to notify its TOP of a status change on the AVR on a generating unit when the AVR hardware on the unit failed and it was operated in manual mode.

Finding: RFC determined that the violations posed a moderate risk, but did not pose a serious or substantial risk, to the reliability of the BPS because Midland’s voltage never dropped below the nominal voltage and had alarms in place that would have alerted personnel if the voltage exceeded certain voltage parameters. In addition, the violation of R3 only concerned one of Midland’s 15 units, Midland maintained its voltage schedule during the manual operation, and Midland had the ability to compensate for the loss of the unit with generation from its other units if necessary. RFC considered certain aspects of Midland’s compliance program to be mitigating factors.

Penalty: $40,000 (aggregate for 4 violations)

FERC Order: Issued October 28, 2011 (no further review)

Midway Sunset Cogeneration Company, FERC Docket No. NP10-60-000 (March 1, 2010)

Reliability Standard: VAR-002-1

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: Not provided

Region: WECC

Issue: Midway Sunset self-certified that on January 30, 2008 it had not notified its Transmission Operators until twelve hours after its PSS went offline, instead of within 30 minutes as required, because the notification requirement was overlooked by operating personnel.

Finding: Midway Sunset was given credit for no history of violations, and WECC found that the violation did not put the bulk power system reliability at substantial risk of harm.

Penalty: $3,000

FERC Order: Issued March 31, 2010 (no further review)

Minnesota Municipal Power Agency, FERC Docket No. NP10-179-000 (September 30, 2010)

Reliability Standard: VAR-002-1

Requirement: R1

Violation Risk Factor: Medium

Violation Severity Level: Not provided

Region: MRO

Issue: MMPA self-reported that it was not operating one of its generating units with the AVR in a voltage set point, and had not notified its Transmission Operator as required by the Reliability Standard.

Finding: It was determined by MRO that the violation did not constitute a serious or substantial risk to the bulk power system because the VAR set point instructions had maintained the appropriate voltage schedule. The duration of the violation was from August 2, 2007, when the standard became enforceable, through January 16, 2009. Additional factors for the penalty determination included that the violation was the first violation of this Reliability Standard and that MMPA self-reported the violation.

Penalty: $0

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

Mirant Delta, LLC, FERC Docket No. NP10-16-000 (November 13, 2009)

Reliability Standard: VAR-002-1

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: Not provided

Region: WECC

Issue: During an internal compliance review, Mirant Delta, LLC (MIDE) discovered four incidences that occurred during unit startups where it failed to notify the Transmission Operator within 30 minutes of the change in status that resulted from a reactive device Power System Stabilized (PSS) outage, as required. MIDE determined that the violation was caused by insufficient understanding and training concerning VAR-002-1 R3.

Finding: WECC found that the duration of the violation was August 10, 2007 (the date when MIDE was included on the NERC Compliance Registry) though March 23, 2009 (when MIDE completed a mitigation plan). WECC and MIDE entered into a settlement agreement to resolve all issues related to the violation of VAR-002-1. In assessing the violations, WECC found that there was no serious or substantial risk to the bulk power system as no outages occurred because of these violations and MIDE did already have some relevant procedures and training in place. In addition, MIDE self-reported the violation, did not have a history of violations of this standard; cooperated with WECC staff; and there were no aggravating factors.

Penalty: $3,000

FERC Order: Issued December 11, 2009 (no further review)

Mirant Potrero, LLC, FERC Docket No. NP10-15-000 (November 13, 2009)

Reliability Standard: VAR-002-1

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: Not provided

Region: WECC

Issue: Through an internal compliance review, Mirant Potrero, LLC (MIPO) discovered an instance of non-compliance when, during unit startup on November 4, 2007, it failed to notify the Transmission Operator of a change in status caused by the outage of a reactive device Power System Stabilizer (PSS) within 30 minutes as required. MIPO determined the primary cause of the violation to be insufficient understanding and training on the standard.

Finding: WECC determined that the duration of the violation was from June 18, 2007 (when VAR-002-1 became enforceable) through March 23, 2009 (when MIPS completed a mitigation plan). WECC and MIPO entered into a Settlement Agreement to resolve all of the outstanding issues related to the violation. WECC found that the violation did not pose a serious or substantial risk to the bulk power system as the outage at the MIPO Unit 3 generator that resulted in the violation only has a generation capacity of 206 MW and the PSS was only out of service for a short timeframe of 14.85 hours before notice was provided to the Transmission Operator. In addition, MIPO self-reported the violation, had no history of violating the standard, cooperated with WECC during the investigation, and there were no aggravating factors.

Penalty: $3,000

FERC Order: Issued December 11, 2009 (no further review)

Montville Power, LLC, FERC Docket No. NP10-103-000 (April 28, 2010)

Reliability Standard: VAR-002-1

Requirement: R3.1

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: NPCC

Issue: Montville Power, LLC (Montville) personnel failed to notify its transmission operator within the required 30-minute limit for a status or capability change of each automatic voltage regulator (AVR).

Finding: The alleged violation occurred from December 3, 2007, the date the AVR was placed in manual mode, until December 5, 2007, when Montville notified its transmission operator of the change in its AVR status. NPCC imposed a $2,000 penalty for the alleged violation, considering that Montville reported the alleged violation after receiving notice of an upcoming “Spot Check” by NPCC; it was Montville’s first alleged violation of NERC Reliability Standards; Montville was cooperative during the compliance enforcement process and there was no attempt to conceal a violation or intent to do so; and alleged violation did not create a serious or substantial risk to the bulk power system.

Penalty: $2,000

FERC Order: Issued May 28, 2010 (no further review)

Morgantown Energy Associates, Docket No. NP11-270 (September 30, 2011)

Reliability Standard: VAR-002-1

Requirement: R1, R2

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: RFC

Issue: Morgantown Energy Associates (MEA) self-certified non-compliance with R1 and R2. RFC determined that MEA violated R1 because the normal mode of operations for its automatic voltage regulator was power factor mode instead of automatic voltage control mode. RFC determined MEA violated R2 because it was unable to maintain its TOP’s voltage schedule during periods of low system voltage and was not exempt from following the schedule because it failed to contact the TOP during these times. The violations lasted from August 2, 2007 to September 6, 2010.

Finding: RFC determined that the violations posed minimal risk to the reliability of the BPS because MEA was operating the generator in the automatic power factor control mode. Moreover, MEA monitored its voltage and facility limits at all times and only has a single 138 kV connection to the BPS. In addition, MEA is a minimal power productive entity of only 50 MW.

Penalty: $15,000 (aggregate for 3 violations)

FERC Order: Issued October 28, 2011 (no further review)

Mt. Poso Congeneration Co., FERC Docket No. NP10-2-000 (October 14, 2009)

Reliability Standard: VAR-002-1

Requirement: R4

Violation Risk Factor: Lower

Violation Severity Level: Not provided

Region: WECC

Issue: In December 2007, Mt. Poso Congeneration Co. (Mt. Poso) self-reported that it could not produce the information required by VAR-002-1 within 30 days of a request. In order to obtain the necessary tap changer information for the main and auxiliary transformers, Mt. Poso has to orchestrate a plant outage so the two transformers could be de-energized and inspected, which would allow the no-load tap changer data to be finalized.

Finding: WECC found that this violation did not pose a serious or substantial risk to the bulk power system since Mt. Poso did not receive or anticipate any requests to provide the required information. The violation was self-reported and was Mt. Poso's first violation of this Reliability Standard. A mitigation plan has been completed.

Penalty: $0

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

NAES Corporation - Burney, Docket No. NP11-270 (September 30, 2011)

Reliability Standard: VAR-002-1

Requirement: R1, R2

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: WECC

Issue: As the result of a self-report, WECC determined NAES Corporation – Burney (NAES) violated R1 because a misunderstanding of its generator’s configuration caused it to continuously operated the generator in power factor control mode during normal operations and failed to notify the TOP that it was not operating in voltage control mode. WECC determined NAES violated R2 because NAES did not maintain its generator voltage or Reactive Power output within applicable Facility Ratings that its TOP had directed, and its TOP had not granted NAES an exemption from compliance.

Finding: WECC determined that the violations posed a minimal risk, but did not pose a serious or substantial risk, to the reliability of the BPS because NAES maintained stable output of the unit, and the violations only applied to a single 30 MW generation facilities that represented only a small fraction of the total generation available to the TOP. The violation of R1 lasted from Aug. 2, 2007 to Jan. 4, 2011, and the violation of R2 lasted from Dec. 18, 2008 to Jan. 4, 2011.

Penalty: $3,500 (aggregate for 2 violations)

FERC Order: Issued October 28, 2011 (no further review)

NAES Corporation – Covert, FERC Docket No. NP11-133-000 (February 28, 2011)

Reliability Standard: VAR-002-1

Requirement: R1

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: RFC

Issue: NAES-Covert discovered that it had not operated its voltage regulator in automatic voltage control mode as required by VAR-002-1. Following manufacturer training and procedures, the voltage regulator was operated in “Voltage Constant” in VAR control mode, with the Power Stabilizing System enabled. NAES-Covert thought that by operating in that mode, it maintained a constant generator terminal voltage. After discussing the issue with the manufacturer, NAES-Covert realized that it was in violation of VAR-002-1, R1.

Finding: RFC assessed a $10,000 penalty for this violation and determined that it posed a minimal risk to bulk power system reliability. Even though the AVR was not in automatic voltage control mode, it remained in VAR control mode which allowed it to respond indirectly to any potential voltage changes while it controlled reactive power.

Penalty: $10,000

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

NAES Corporation – Lincoln Generating Facility, FERC Docket No. NP10-142-000 (July 6, 2010)

Reliability Standard: VAR-002-1

Requirement: R1

Violation Risk Factor: Medium

Violation Severity Level: Not provided

Region: RFC

Issue: As Generator Operator, NAES operated its generator voltage regulators in Power Factor mode instead of automatic voltage control mode without notifying its Transmission Operator. Duration of violation was from June 18, 2007, when the standard became enforceable, until March 10, 2009.

Finding: This violation did not pose a serious or substantial threat to the reliability of the bulk power system because NAES was actually controlling the generator’s voltage, even though not in automatic voltage control mode as required. There had been no reported periods of instability during the periods when the unit had been dispatched. The violation was NAES’ first violation of the standard, NAES had a quality compliance program in place, and there was an extenuating circumstance caused by equipment design – the Generator mode had to be in “OFF” position in order to operate in automatic voltage control mode.

Penalty: $9,000

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

NextEra Companies, FERC Docket No. NP11-18-000 (November 5, 2010)

Reliability Standard: VAR-002-1

Requirement: R3.1

Violation Risk Factor: Medium

Violation Severity Level: N/A

Region: NPCC

Issue: A member of the NextEra companies submitted a Self-Report for a failure to contact the Transmission Owner (TO) within 30 minutes of a change in status to the Automatic Voltage Regulator (AVR) of one of its generating units. The AVR experienced a malfunction and was placed in the manual mode for approximately two weeks. There was no evidence the TO was notified of the event.

Finding: The violation lasted for the duration of the AVR outage. The violation did not pose a serious or substantial risk to the reliability of the bulk power system because although there was no documentation that the TO was contacted, NPCC found the company did take appropriate steps to be complaint.

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

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

NextEra Energy Resources, LLC, FERC Docket No. NP10-2-000 (October 14, 2009)

Reliability Standard: VAR-002-1

Requirement: R1, R2, R3

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

Violation Severity Level: Not provided

Region: WECC

Issue: NextEra Energy Resources (NextEra) self-reported that even though it operated its assets in automatic voltage regulator mode, it did not have documented procedures specifying the modes of operation or that NextEra would maintain the generator voltage or reactive power output (within the Facility Ratings) as directed, especially by the Transmission Operator.

Finding: WECC found that the violations did not pose a serious or substantial risk to the bulk power system since NextEra did actually operate in automatic voltage control mode and is in communication with its Transmission Operator. The violations are primarily documentation issues. The violations were also self-reported and were NextEra's first violations of this Reliability Standard. Even though the violations occurred before the Reliability Standards became mandatory, NextEra did not complete its mitigation plan in a timely manner. This delay turned the violations into post-June 18, 2007 violations. Even with the late completion of the mitigation plan, no penalty was imposed.

Penalty: $0

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

NextEra Energy Resources, LLC, FERC Docket No. NP11-16-000 (November 5, 2010)

Reliability Standard: VAR-002-1

Requirement: R1, R3

Violation Risk Factor: Medium

Violation Severity Level: N/A

Region: TRE

Issue: NextEra self-reported non-compliance for failing to operate its generators in Automatic Voltage Regulator (AVR) mode not notifying the Transmission Operator within 30 minutes of changes in statues to its AVR.

Finding: The violation did not pose a serious or substantial risk to the reliability of the bulk power system because NextEra followed relevant regional protocol and maintained the voltage level requested by the Transmission Operator’s delegate.

Penalty: $150,000 (aggregated for multiple violations)

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

Old Dominion Electric Cooperative (ODEC), Docket No. NP13-41-000 (June 27, 2013)

Reliability Standard: VAR-002-1

Requirement(s): 1, 2, 3

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: SERC Reliability Corporation (SERC)

Issue: ODEC, a registered GOP, submitted a self-report explaining that it found occasions where, for several generators, its automatic voltage regulators (AVRs) were not in automatic voltage control mode, but ODEC did not give its TOP that information as required (R1) or within the 30-minute time frame for reporting such information (R3). Regarding R2, ODEC also self-reported that it was unable to show that several combustion turbines at two plants were being operated within the voltage schedule provided by the TOP.

Finding: The violations were deemed to pose minimal risk to BPS reliability, but not serious or substantial risk. ODEC was found to have followed all TOP-issued directives during the violation time period and all units would have been able to respond appropriately if called upon. Also, the units are peaking generating units that are operated an average of 65 times during a typical year. In determining the appropriate penalty, SERC considered ODEC’s internal compliance program as a mitigating factor.

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

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

Plains End Operating Services, LLC, FERC Docket No. NP10-2-000 (October 14, 2009)

Reliability Standard: VAR-002-1

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: Not provided

Region: WECC

Issue: In July 2008, Plains End Operating Services, LLC (PEOS) self-certified that it had not notified its Transmission Operator within 30 minutes of a status or capability change on its generator reactive power resources (such as the status of each automatic voltage regulator and power system stabilizer as well as the expected duration of the change in status or capability).

Finding: WECC found that this violation did not pose a serious or substantial risk to the bulk power system since PEOS was engaged in regular communications with its Transmission Operator (even though not by the methods required by VAR-002-1). This was PEOS's first violation of this Reliability Standard. A mitigation plan has been completed.

Penalty: $0

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

Post Oak Wind, LLC, FERC Docket No. NP10-171-000 (September 30, 2010)

Reliability Standard: VAR-002-1

Requirement: R2

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: TRE

Issue: In November 2008, TRE discovered, during a spot check, that Post Oak Wind, LLC (Post Oak) did not follow a directive issued by ERCOT on May 22, 2008 (nor did Post Oak provide a valid reason for why it was unable to comply) to increase VAR production in order to help with a low voltage situation on the grid. As a result, Post Oak did not provide the VAR support that was directed by ERCOT.

Finding: Post Oak agreed to pay a penalty of $198,600 and to undertake other mitigation measures in order to resolve violations of IRO-001-1 and VAR-002-1. TRE found that the violations did not pose a serious or substantial risk to bulk power system reliability since Post Oak, a wind farm, only has a combined capacity of 200 MW. If Post Oak possessed more capacity, TRE determined that the failure to comply with the ERCOT directive could have posed a serious or substantial risk to the bulk power system. Post Oak and its subcontractors were found to be untrained and uncooperative, as well as unable to respond to ERCOT’s requests remotely. The duration of the violation was on May 22, 2008. Furthermore, these were Post Oak’s first violations of the relevant Reliability Standards; Post Oak was cooperative during the enforcement process and did not attempt to conceal the violations; there was a compliance program in place; and there were no additional mitigating or aggravating factors present.

Penalty: $58,600 (with the violation of IRO-001-1, an aggregate penalty of $198,600)

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

PPL Montana, LLC, FERC Docket No. NP10-59-000 (March 1, 2010)

Reliability Standard: VAR-002-1

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: Not provided

Region: WECC

Issue: PPL Montana self-reported that it failed to notify its Transmission Operator within 30 minutes that AVRs at three of its hydroelectric facilities were out of service.

Finding: Duration from June 18, 2007, the date the standard became enforceable, through September 15, 2009. PPL Montana was given credit for self-reporting the violation and because it was PPL Montana's first violation of the standard. WECC determined that the violation did not put the bulk power system reliability at substantial risk of harm.

Penalty: $7,000

FERC Order: Issued March 31, 2010 (no further review)

Progress Energy Carolinas (PEC), Docket No. NP13-27, February 28, 2013

Reliability Standard: VAR-002-1

Requirement: R3; R3.1

Violation Risk Factor: Medium

Violation Severity Level: High

Region: SERC

Issue: PEC, as a GOP, self-reported a violation of R3 after discovering that it had failed to notify the TOP within thirty minutes of a status in status of Reactive Power resources, and the expected duration of the change in status on multiple occasions. SERC determined that the violation was caused by inadequate operator training resulting in uncertainty regarding whether to report certain situations.

Finding: SERC determined that the R3 violation posed a minimal risk to the reliability of the BPS because any voltage regulation concerns would have been identified during PEC's daily calls with its TOP which inform the TOP of the expected status of all of the plants and the associated generator Reactive Power resources. In addition, only half of the instances at issue pertained to units of greater than 75 MW, and no outages or loss of load resulted from any of the instances. Furthermore, PEC's system is designed so as to reduce the overall system voltage if an individual AVR control is lost. Finally, because PEC had no reported noncompliance with VAR-002 R2, indicating its ability to maintain voltage per the TOP schedule. SERC and PEC entered into a settlement agreement to resolve the violation whereby PEC agreed to pay a penalty and to undertake other mitigation measures to come into compliance with R3. SERC considered the internal compliance program of PEC's parent company, Progress Energy, which PEC followed, to be a mitigating factor in making its penalty determination. The violation began when the Compliance Audit was completed. PEC neither admits nor denies the R3 violation.

Penalty: $12,000

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

Progress Energy Florida, FERC Docket No. NP10-2-000 (October 14, 2009)

Reliability Standard: VAR-002-1

Requirement: R3.1

Violation Risk Factor: Medium

Violation Severity Level: Not provided

Region: FRCC

Issue: In December 2007, Progress Energy Florida (PEF) self-reported that the generator operator at three of its generation facilities switched the status of its generator reactive power resources (from the power factor mode to the automatic voltage control mode), but failed to alert PEF’s Transmission Operator within 30 minutes as required.

Finding: FRCC found that this violation did not involve a serious or substantial risk to bulk power system reliability since the automatic voltage regulation at those three PEF facilities was still operating in voltage control mode. In addition, PEF self-reported the violation; this was PEF’s first violation of this Reliability Standard; and it completed a mitigation plan.

Penalty: $0

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

PSEG Fossil LLC, FERC Docket No. NP11-158-000 (March 30, 2011)

Reliability Standard: VAR-002-1

Requirement: R1

Violation Risk Factor: Medium

Violation Severity Level: Moderate

Region: RFC

Issue: PSEG Fossil LLC (“PSEG”) submitted a self-report that led RFC to determine that PSEG violated R1 because it did not operate 16 of 35 generating units in automatic voltage control mode, and did not notify the TO that these units were in power factor mode.

Finding: RFC determined the violation posed a minimal risk, but did not pose a serious or substantial risk to the reliability of the BPS because PSEG was controlling all of the units in the automatic power factor control mode, which was consistent with its status and business practice. Moreover, there were no adverse impacts to the system as a result of the violation. The NERC BOTCC considered the following factors: this was PSEG’s first violation; PSEG self-reported the violation and was cooperative; there was no evidence of any attempt or intent to conceal the violations; and there were no other mitigating or aggravating factors.

Penalty: $15,000

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

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

Reliability Standard: VAR-002-1

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: Not provided

Region: WECC

Issue: During an audit, it was determined that at 1017 on August 29, 2007, one of Public Service Company of New Mexico's (PNM) generating station's PSS unit was disabled for three minutes, but PNM failed to notify the relevant Transmission Operator. Separately, on March 31, 2008, a different unit experienced an AVR failure, and the operator did not notify the relevant Transmission Operator.

Finding: Duration of the violation was from August 29, 2007 through March 30, 2009. The violation did not pose a serious or substantial risk to the reliability of the bulk power system because the PNM Transmission Operator has visibility and control of voltage throughout its system and would have noticed any significant abnormalities arising out of either incident. Moreover, both incidents were short in duration. This 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. NP10-56-000 (March 1, 2010)

Reliability Standard: VAR-002-1

Requirement: R1, R3

Violation Risk Factor: Medium

Violation Severity Level: Not provided

Region: WECC

Issue: Chelan County self-reported that on March 11, 2009, the AVR on a generating unit at its hydroelectric plant failed to indicate proper status for unit start and therefore was not operating in an automatic voltage control mode. The facility was then removed from service without notifying the Transmission Operator.

Finding: Duration of violation from March 11, 2009, when the standards became enforceable, until March 23, 2009. The violation of VAR-002-1 did not pose a serious or substantial risk to the bulk power system because Chelan County had one non-compliant generating unit out of 16, and it was out of service for only a few hours before it was repaired and returned to service. Chelan County was given credit for its self-report, and the fact this was its first violations of these standards.

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

FERC Order: Issued March 31, 2010 (no further review)

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

Reliability Standard: VAR-002-1

Requirement: R1, R2, R3, R5

Violation Risk Factor: Medium (for R1, R2, R3, R5)

Violation Severity Level: Not provided

Region: WECC

Issue: Public Utility District #1 of Clark County (CKPD) self-reported that its procedures had incorrectly stated that it needed to communicate with its Transmission Owner (instead of with the Transmission Operator as required). In addition, CKPD self-reported that it could not prove that it had been granted an exemption from maintaining generator voltage or reactive power, that it had been notifying its Transmission Operator as required, or that it was following the specifications provided by its Transmission Operator.

Finding: WECC found that the violations did not pose a serious or substantial risk to the bulk power system since CKPD was actually in communication with its Transmission Operator and was also operating in the automatic voltage control mode. In addition, the violations were primarily documentation issues. The violations were self-reported and were CKPD's first violations of this Reliability Standard. Even though the violations occurred before the Reliability Standards became mandatory, CKPD did not complete its mitigation plan in a timely manner. This delay turned the violations into post-June 18, 2007 violations. Even with the late completion of the mitigation plan, no penalty was imposed.

Penalty: $0

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

Progress Energy Florida, FERC Docket No. NP12-2 (October 31, 2011)

Reliability Standard: VAR-002-1

Requirement: R3/3.1

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: FRCC

Issue: During a compliance audit, FRCC found that Progress Energy Florida (PEF), as a GOP, did not communicate to its TOP the expected duration of a change in status of one of its generator reactive power resources after the AVR rejected to manual on December 11, 2007.

Finding: FRCC found that the violation constituted only a minimal risk to BPS reliability since the TOP knew PEF’s AVR was unavailable and had already directed the GOP to maintain the voltage schedules provided. The violation occurred on December 11, 2007. PEF had a compliance program in place, but it was only evaluated as a neutral factor.

Penalty: $75,000 (aggregate for 4 violations)

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

RRI Energy Etiwanda, Inc., FERC Docket No. NP11-49-000 (November 30, 2010)

Reliability Standard: VAR-002-1

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: WECC

Issue: RRI self-reported that on August 11, 2009 it did not enable its Unit 3 Power System Stabilizer, and the unit did not automatically turn on for several hours when the unit load exceeded 30 MWs. It also did not notify the relevant Transmission Operator of the change in Power System Stabilizer status within 30 minutes as required.

Finding: It was determined by WECC that the violation posed minimal risk to the reliability of the bulk power system because RRI's Power System Stabilizer was out of service for several hours, but RRI's operators maintained a stable system during that time. The duration of violation was from August 11, 2009, when RRI changed its Power System Stabilizer status, through August 27, 2009, when RRI notified its transmission operator of the change in status. The self-report and RRI's effective compliance culture were mitigating factors in determining the penalty assessed.

Penalty: $1,500

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

Southern Company Services, Inc. - Gen, Docket No. NP12-27 (May 30, 2012)

Reliability Standard: VAR-002-1

Requirement: R1, R3 (3.1)

Violation Risk Factor: Medium (R1, R3)

Violation Severity Level: Lower (R1), Severe (R3)

Region: SERC

Issue: In September 2009, Southern Company Services, Inc. – Gen (SCS-Gen), as a GOP, self-reported that in 10 instances, it did not notify its TOP, as required, when it changed the status on the AVR at six of its plants from automatic voltage control mode to manual mode. Eight instances involved the AVR switching to manual. Five of those instances occurred at remotely controlled generators which did not have alarms to alert the operators to the switch. In two of the instances, a SCS-Gen plant operator switched the AVR to manual mode in response to observed malfunctions, without timely notifying the TOP. On those 10 instances, SCS-Gen operated its generators in a mode other than automatic voltage control mode, without notifying its TOP. (R1) SCS-Gen did not notify its TOP within 30 minutes, as required, of the change in status. (R3)

Finding: SERC found that the violations constituted a minimal risk to BPS reliability since each instance was an isolated incident involving a single generator unit and none of the generator plants operated outside of their assigned voltage schedule. In addition, in two of the instances, SCS-Gen was late in reporting the change in status as a result of a tornado in the area. The duration of the violations was from January 21, 2008 through September 14, 2009. SERC evaluated SCS-Gen’s compliance program as a mitigating factor.

Penalty: $10,000 (aggregate for 4 violations)

FERC Order: Order issued June 29, 2012 (no further review)

Sunbury Generation LP, FERC Docket No. NP12-10 (December 30, 2011)

Reliability Standard: VAR-002-1

Requirement: R2

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: RFC

Issue: During a compliance audit in September 2010, RFC found that Sunbury Generation LP (Sunbury), as a GO, was not properly maintaining its voltage schedule as directed by PJM Interconnection, L.L.C. (PJM), its TOP. Under PJM’s default voltage schedule, 230 kV operators (such as Sunbury) who do not receive a specific voltage schedule have a voltage schedule of 235 kV, plus or minus 4 kV (with a high limit voltage of 242 kV). Sunbury’s 230 kV switchyard exceeded the PJM default voltage schedule (on July 12, 2010 at 239.5 kV for 45 minutes and on August 20, 2010 at above 239 kV for six hours).

Finding: RFC found that the VAR-002-1 violation constituted a minimal risk to BPS reliability since Sunbury was cooperating with any voltage or reactive assistance requests it received from its TO or TOP and has never received notification that it did not follow a request. Sunbury never exceeded the high limit of 242 kV. In addition, Sunbury does not have control over the transformers that control the switchyard voltages as they are located in the switchyards (which are owned and operated by a different utility). Furthermore, except during startup mode or during a malfunction, the AVR is always operated in automatic mode (and the TOP is notified when the AVR is switched to manual mode). Testing also showed that there was no voltage change in the 230 kV switchyard when Sunbury operated its generator to both the lead and lag limits. The duration of the VAR-002-1 violation was from August 2, 2007 through May 4, 2011. RFC decided not to impose a monetary penalty for the VAR-002-1 violation since Sunbury had never received a specific voltage schedule from its TOP (and never obtained an exemption) and it does not control the transformers that control the switchyard. RFC also evaluated Sunbury’s compliance program as a mitigating factor.

Penalty: $0 (Sunbury received a $20,000 penalty for three other violations)

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

Tennessee Valley Authority (TVA), Docket No. NP13-5-000 (October 31, 2012)

Reliability Standard: VAR-002-1

Requirement: R2

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: SERC

Issue: TVA self-reported violations of R2 arising based on its nuclear power generation (NPG) operators not employing full operational MVar capability to maintain the published 500 kV switchyard voltage schedules and its continued deviations from the TOP-prescribed voltage schedules. In particular, based on historical data for TVA's three nuclear stations over four years, the plants' switchyard voltage deviated from the voltage schedule for approximately 1,500 hours per year, with voltage for over 80% of those hours exceeding the schedule. The lowest and highest voltages reported during this time were 2.5% below and 2.8% above the voltage schedule, respectively.

Finding: SERC determined that the R2 violation posed a moderate risk to the reliability of the BPS, acknowledging that while the TOP's ability to maintain system stability may be compromised by deviations from the published voltage schedule, other factors may mitigate this risk. In this case, the extent of the voltage deviation was a maximum of 2.8% from the TOP-directed voltage schedule, over 80% of deviations provided the TOP with more voltage than requested; the voltage did not exceed the equipment ratings; the TOP employed automatic voltage control mode; and the Chief Transmission System Operations Manager reported no signs that the BPS was reliability was compromised. SERC and TVA entered into a settlement agreement to resolve multiple violations, whereby TVA agreed to pay a penalty and to undertake other mitigation measures to come into compliance with R2. SERC considered TVA's internal compliance program a mitigating factor in making its penalty determination and also found that TVA's compliance history was not an aggravating factor. The duration of the violation was from June 18, 2007 through April 30, 2012. TVA neither admits nor denies the R2 violation.

Penalty: $25,000 (aggregate for 4 violations)

FERC Order: Issued November 29, 2012 (no further review)

Tri-State Generation and Transmission Association, Inc. - Marketing, FERC Docket No. NP10-2-000 (October 14, 2009)

Reliability Standard: VAR-002-1

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: Not provided

Region: WECC

Issue: In September 2007, Tri-State Generation and Transmission Association, Inc. – Marketing (TSMD) self-reported that even though the power system stabilizer (PSS) at the Pyramid Station (which consists of 4 units rated at 40 MVA) had been installed it 2003, it was never placed in service – even though it had previously been reported, incorrectly, to be in service.

Finding: WECC found that this violation did not pose a serious or substantial risk to the bulk power system since the relevant units were never in service. In addition, the Pyramid Station units are peaking units, so even when they are placed in service, they only spend a limited amount of time online. The violation was self-reported and was TSMD's first violation of this Reliability Standard. A mitigation plan has been completed.

Penalty: $0

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

Tri-State Generation and Transmission Association, Inc. – Marketing, FERC Docket No. NP10-95-000 (April 28, 2010)

Reliability Standard: VAR-002-1

Requirement: R3/3.1

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: WECC

Issue: Tri-State Generation and Transmission Association, Inc. – Marketing (TSMD) did not notify its transmission operator of a status change to its automatic voltage regulator within 30 minutes of the change as required by the Reliability Standard.

Finding: The alleged violation occurred from November 19, 2008, when the failure to notify the transmission operator of the status change occurred, through March 5, 2009, when TSMD completed a mitigation plan. WECC imposed a penalty of $25,000, considering that the violation was self-reported; it was TSMD's second violation of this standard; TSMD was cooperative during the compliance enforcement process and did not attempt to conceal the violations nor was it intentional; and the violation did not create a serious or substantial risk to the reliability of the bulk power system.

Penalty: $25,000

FERC Order: Issued May 28, 2010 (no further review)

Unidentified Registered Entity, FERC Docket No. NP11-21-000 (November 5, 2010)

Reliability Standard: VAR-002-1

Requirement: R1

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: RFC

Issue: In August 2009, the Unidentified Registered Entity (URE) self-reported that on five occasions, it had not notified its Transmission Operator when the status of its automatic voltage regulator (AVR) at its power plant was switched, for routine testing, from automatic voltage control to manual mode.

Finding: RFC and the URE entered into a settlement agreement to resolve all outstanding issues, whereby the URE agreed to pay a penalty of $8,000 and to undertake other mitigation measures to resolve multiple violations. RFC found that the violation of VAR-002-1 did not constitute a serious or substantial risk to bulk power system reliability since the times when the AVR at its power plant was switched from automatic voltage control mode was only during routine testing at off-peak hours and these instances were brief in duration (spanning from 2 to 6 minutes, for a total of 24 minutes). In addition, the URE was exercising control over the AVR at those times. The duration of the violations was from January 1, 2008 through August 7, 2009. In deciding on the penalty amount, RFC considered the fact that the violations were the URE’s first violations of the relevant Reliability Standard; the violations were self-reported; the URE was cooperative during the enforcement process and did not attempt to conceal the violations; the URE has a compliance program in place; and there were no additional mitigating or aggravating factors.

Penalty: $8,000 (aggregate for multiple violations)

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

Unidentified Registered Entity, FERC Docket No. NP11-125-000 (February 23, 2011)

Reliability Standard: VAR-002-1

Requirement: R1

Violation Risk Factor: Medium

Violation Severity Level: N/A

Region: RFC

Issue: RFC found that the Unidentified Registered Entity (URE) operated its Unit #2 AVR in manual mode without notification to the Transmission Operator.

Finding: The NERC Board of Trustees Compliance Committee (NERC BOTCC) approved a settlement agreement which included a penalty in the amount of $65,000 for this and other violations. In reaching this determination, the NERC BOTCC considered the following facts, among others: the violation constituted the URE's first violation of the subject NERC Reliability Standard; the URE self-reported the violation; the URE cooperated during the compliance enforcement process; the URE's compliance program; the violation did not create a serious or substantial risk to the bulk power system; and there were no other mitigating or aggravating factors or extenuating circumstances.

Penalty: $65,000 (aggregate for multiple violations)

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

Unidentified Registered Entity, FERC Docket No. NP12-38 (July 31, 2012)

Reliability Standard: VAR-002-1

Requirement: R1

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: WECC

Issue: URE self-reported that one of its facilities was operating in Constant Reactive Power Output control mode (as opposed to the required Automatic Voltage Control mode) and that the TOP was not notified of this operating status. The previous owners of the generation facility had mistakenly set the facility to Constant Reactive Power Output control mode and, after URE purchased the facility, it did not immediately realize the error. Once the error was discovered, URE reactivated the Automatic Voltage Control mode.

Finding: WECC found that the VAR-002-1 violation only constituted a minimal risk to BPS reliability since URE’s plant personnel were manually controlling the system to provide needed voltage support to maintain system reliability. Furthermore, the relevant facility represented only a small portion (10.6%) of URE’s overall generation capacity. In approving the settlement agreement, the NERC BOTCC considered the fact that some of the violations were URE’s second or third violation of the relevant Reliability Standards; some of the violations were self-reported; URE was cooperative during the enforcement process and did not conceal the violations; URE had an internal compliance program (which was evaluated as a mitigating factor); the violations did not constitute a serious or substantial risk to BPS reliability; and there were no additional aggravating or mitigating factors.

Penalty: $72,000 (aggregate for 12 violations)

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

USACE – Little Rock District, FERC Docket No. NP11-19-000 (November 5, 2010)

Reliability Standard: VAR-002-1

Requirement: R1, R2

Violation Risk Factor: Medium (for R1 and R2)

Violation Severity Level: Not provided

Region: SPP

Issue: In March 2008, USACE – Little Rock (USACE-LR) self-certified that it did not have a formal policy in place mandating that its personnel operate the generation units in AVR mode. In addition, USACE-LR also self-certified that it did not establish a formal policy requiring its operators to utilize alternative method to control generator voltage and reactive power output to comply with voltage or reactive power schedules as directed by the Transmission Operator.

Finding: SPP found that the violations did not constitute a serious or substantial risk to the bulk power system as even absent formal policies, USACE-LR operated its generators in automatic voltage control mode and would shut down its generator unit if the automatic voltage control mode was inoperable. The duration of the violations was from July 10, 2007 through January 26, 2009. In deciding not to impose a penalty for multiple violations, SPP considered the fact that the violations represented USACE-LR’s first violations of the relevant Reliability Standards; the violations were caused by USACE-LR not having formal procedures and policies in place; and USACE-LR did not attempt to conceal the violations. In addition, the violations were self-certified.

Penalty: $0

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

USACE – Tulsa District, FERC Docket No. NP10-160-000 (September 13, 2010)

Reliability Standard: VAR-002-1

Requirement: R1, R2

Violation Risk Factor: Medium

Violation Severity Level: Not provided

Region: SPP

Issue: VAR-002-1 R1 requires entities to operate each generator connected to the interconnected transmission system in the Automatic Voltage Control Mode unless the entity has notified the Transmission Operator (TOP). USACE-Tulsa self-certified that it was not compliant with this requirement and did not have a written policy requiring its operators to operate its generation units in the Automatic Voltage Regulation Mode, but, according to USACE-Tulsa, it was operating its generators in Automatic Voltage Control Mode. VAR-002-1, R2 requires entities to maintain the generator voltage or Reactive Power output (within applicable Facility Ratings) as directed by the TOP. USACE-Tulsa self-certified that it was not compliant with the requirement and did not have a written policy requiring its operators to use alternative methods to control generator voltage and reactive power output to meet voltage or reactive power schedules as directed by the TOP nor did it have operating procedures in place requiring its operators to respond to voltage or reactive power schedules from its TOP, although USACE-Tulsa stated that it complies with directions from its TOP.

Finding: It was determined by SPP that the violation did not pose a serious or substantial risk to the bulk electric system because USACE-Tulsa did normally operate its generating units in Automatic Voltage Control Mode and shut down a unit if it was unable to operate in the Automatic Voltage Control Mode. Despite having no policy, USACE-Tulsa stated it complied with directives from the Transmission Operator. The duration of the violations was from July 10, 2007 through April 29, 2009 (R1) and December 20, 2009 (R2).

Penalty: $0

FERC Order: Issued December 16, 2010, 133 FERC ¶ 61,214 (2010), reh'g denied 137, FERC ¶ 61,044 (2010)

Wellhead Services, Inc., FERC Docket No. NP11-31-000 (November 30, 2010)

Reliability Standard: VAR-002-1

Requirement: R1

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: WECC

Issue: WECC determined that Wellhead Services, Inc. (“WHSV”), as a Generator Operator, did not notify its Transmission Operator that it was operating its automatic voltage regulator in the VAR mode as opposed to automatic voltage control mode.

Finding: A $4,000 penalty was imposed for this violation. In assessing the penalty the following facts were considered: the violation constituted WHSV’s first violation of this Reliability Standard; WHSV self-reported the violation; WHSV cooperated during the compliance enforcement process; WHSV did not attempt to conceal the violation or intend to do so; the violation did not create a serious or substantial risk to the bulk power system and there were no other mitigating or aggravating factors or extenuating circumstances.

Penalty: $4,000

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

Wheelabrator Lassen Inc., FERC Docket No. NP10-2-000 (October 14, 2009)

Reliability Standard: VAR-002-1

Requirement: R1, R2

Violation Risk Factor: Medium (for R1, R2)

Violation Severity Level: Not provided

Region: WECC

Issue: In June 2007, Wheelabrator Lassen Inc. (WL) self-reported that its facility was operating the AVR for its 42 MW gas turbine generator in automatic power factor control mode (instead of in automatic voltage control mode as required). WL notified its Transmission Operator of this practice and requested to continue operating in power factor control mode, but was still awaiting a response.

Finding: WECC found that the violations did not pose a serious or substantial risk to the bulk power system since WL's facility had been operating in power factor control mode without incident since it started up in 1983. The violations were self-reported and were WL's first violations of this Reliability Standard. A mitigation plan has been completed.

Penalty: $0

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