NERC Case Notes: Reliability Standard VAR-002-1.1a | White & Case LLP International Law Firm, Global Law Practice
NERC Case Notes: Reliability Standard VAR-002-1.1a

NERC Case Notes: Reliability Standard VAR-002-1.1a

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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.

Allegheny Energy Supply Company, L.L.C. (AE Energy), FERC Docket No. NP12-12 (January 31, 2012)

Reliability Standard: VAR-002-1.1a

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: High

Region: RFC

Issue: AE Supply, in its role as a GOP, self-reported that it did not notify its TOP of unplanned changes in status when it placed its Automatic Voltage Regulator (AVR), a generator reactive power resource, into manual mode on nine occasions. Six times, the 30-minute notification period was missed by between six and approximately 105 hours. Three other times, the change in status was for a period of less than 30 minutes and AE Supply did not inform its TOP of the change.

Finding: The violation constituted a moderate risk to BPS reliability because the generators involved are responsible for reactive and voltage control required for proper voltage levels, reactive flows and reactive resources are maintained within applicable Facility Ratings for equipment protection and BPS reliability. During the periods of manual control, AE Supply was maintaining the generator voltage or reactive power output as directed by the TOP. The duration of the violation was from May 27, 2010 through June 6, 2011. RFC considered the compliance programs in place during the period of violation as a mitigating factor in determining the penalty amount.

Penalty: $15,000

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

Braintree Electric Light Department, FERC Docket No. NP11-172-000 (April 29, 2011)

Reliability Standard: VAR-002-1.1a

Requirement: R1, R3

Violation Risk Factor: Medium

Violation Severity Level: Lower (R1), Severe (R3.1)

Region: NPCC

Issue: Braintree Electric Light Department ("BELD") self-reported a violation of R1 because it did not operate the automatic voltage regulator (AVR) in automatic voltage control mode for the Thomas Watson generating units. In addition, BELD violated R3/3.1 because it did not notify its Transmission Operator of the condition within 30 minutes of the switch from automatic voltage control mode to voltage and reactive mode.

Finding: NPCC determined the violations posed a moderate risk to the bulk power system because maintaining the AVR in the voltage control mode is necessary for maintaining voltages on the bulk power system, but there were no reports of any issues related to the Thomas Watson generation site during the relevant time. The NERC BOTCC considered the following factors: BELD self-reported the violations; this was BELD's first violation of VAR-002-1.1a; BELD was cooperative; although BELD had a compliance procedure in place, NPCC did not consider it 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: $15,000

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

Brazos Electric Power Co-op, Inc., FERC Docket No. NP11-228-000 (June 30, 2011)

Reliability Standard: VAR-002-1.1a

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: Moderate

Region: TRE

Issue: TRE found that, in two instances, Brazos Electric Power Co-op, Inc. (Brazos Electric) did not inform its Transmission Operator (ERCOT) within 30 minutes of a change in status of its Automatic Voltage Regulator (AVR). On January 30, 2009, Brazos Electric repaired the broken AVR at its Jack County CT2, but did not notify ERCOT that the AVR was back in service within the required timeframe. On September 21, 2009, during the start-up of the Miller Generation Unit 1, the AVR was not responding, so the plant operator changed the AVR to operate in manual mode, but did not inform ERCOT in a timely manner of this action. ERCOT was notified when the AVR at the Miller Generating Unit 1 returned to automatic mode.

Finding: TRE found that the violation did not constitute a serious or substantial risk to bulk power system reliability since the voltage was being controlled manually at the Miller Generation Unit 1 and the lack of notification when the AVR at Jack County CT2 was back in service was actually beneficial to reliability. The violation occurred on January 30, 2009 and September 21, 2009.

Penalty: $7,000

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

Calpine Energy Services, FERC Docket No. NP11-228-000 (June 30, 2011)

Reliability Standard: VAR-002-1.1a

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: FRCC

Issue: Calpine Energy Services (CES) self-reported that it did not notify its Transmission Operator within 30 minutes, as required, when a circuit board malfunction changed the automatic voltage regulator (AVR) at its generating facility from automatic to manual operation mode. It took CES 21 hours to fix the malfunction.

Finding: FRCC found that the violation only constituted a minimal risk to bulk power system reliability since the Transmission Operator was able to monitor, via the SCADA system, the generator reactive output and to provide directions as needed. The duration of the violation was from September 26, 2009 through September 27, 2009.

Penalty: $3,500

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

Camp Grove Wind LLC (Camp Grove), Docket No. NP12-26-000 (April 30, 2012)

Reliability Standard: VAR-002-1.1a

Requirement: R2

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: RFC

Issue: During a Compliance Audit in July 2011, RFC determined that Camp Grove was in violation of VAR-002-1.1a R2 based on its failure to ensure the voltage of its wind turbine generators was within the parameters defined in its voltage schedule and as assigned by its TOP. After a distribution power outage in August 2010, Camp Grove’s operator reset the voltage output to factory settings rather than the voltage schedule provided by its TOP causing the facility to operate between 0.5 and 3 kV above the correct voltage schedule.

Finding: The violation was determined to pose a minimal risk to BPS reliability because the area in which Camp Grove operates – the Commonwealth Edison Company system – is a “stiff” system, which means many generator reactive resources are available to maintain voltage control. As such, the impact of Camp Grove’s wind turbine generators on local voltages was limited. During the violation period, Camp Grove followed all voltage level orders received from its TOP. Also, the mode on Camp Grove’s AVR was set to automatic for the duration of the violation. In determining the appropriate penalty, RFC considered Camp Grove’s internal compliance program to be a mitigating factor. RFC further considered that the violation was discovered during a Compliance Audit and not through a self-report so no mitigating credit was applied; however, additional mitigating factors were Camp Grove’s cooperation and remedial action during the Compliance Audit and enforcement process.

Penalty: $1,800

FERC Order: Order issued May 30, 2012 (no further review)

City of Clarksdale, Mississippi, Clarksdale Public Utilities Commission, FERC Docket No. NP11-62-000 (December 22, 2010)

Reliability Standard: VAR-002-1.1a

Requirement: R1

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: SPP

Issue: The City of Clarksdale, Mississippi, Clarksdale Public Utilities Commission (Clarksdale), as a Generator Operator, failed to operate the Crossroads Energy Center generation facility in the automatic voltage control mode and failed to notify its Transmission Operator.

Finding: The NERC Board of Trustees Compliance Committee (NERC BOTCC) approved a $5,000 penalty for this and other Reliability Standards violations. In assessing the penalty, the NERC BOTCC considered the following facts: this was Clarksdale's first violation of the subject NERC Reliability Standards; the violations were self-reported; Clarksdale cooperated during the compliance enforcement process; the VAR-002-1.1a violation was not an intentional violation; Clarksdale did not attempt to conceal the violations or intend to do so; the violations 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: $5,000 (aggregate for multiple violations)

FERC Order: Issued January 21, 2011 (no further review)

Covanta Southeastern Florida Renewable Energy, Ltd., FERC Docket No. NP11-228-000 (June 30, 2011)

Reliability Standard: VAR-002-1.1a

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: FRCC

Issue: Covanta Southeastern Florida Renewable Energy, Ltd. (COVS) self-reported that it did not notify its Transmission Operator within 30 minutes, as required, when a power loss at a generating facility caused the automatic voltage regulator (AVR) to change from automatic to manual operation mode (as a result of the Programmable Logic Controller repowering the sequence at the generating plant). It took COVS 22 hours to discover the problem and notify its Transmission Operator.

Finding: FRCC found that the violation only constituted a minimal risk to bulk power system reliability since the Transmission Operator was able to monitor, via the SCADA system, the generator reactive output and to provide directions as needed. The duration of the violation was from March 22, 2010 through March 23, 2010.

Penalty: $1,000

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

Dynegy Inc., FERC Docket No. NP11-241-000 (July 28, 2011)

Reliability Standard: VAR-002-1.1a

Requirement: R1, R3/3.1

Violation Risk Factor: Medium (for R1, R3/3.1)

Violation Severity Level: Severe (for R1, R3/3.1)

Region: NPCC

Issue: In January 2010, Dynegy Inc., as a Generator Owner and Generator Operator, self-reported that on December 11, 2009, the control room operator at its Sithe Independence plant, after switching the Automatic Voltage Regulation (ACR) from the Automatic Voltage Control (AVC) mode to the automatic Volt-Ampere Reactive (VAR) control mode in response to a request from its Transmission Operator for a 75 Megavolt Ampere-Reactive reduction (MVAR) of each of the plant’s two interconnection ties, did not return the AVR back to its AVC mode upon achieving the requested MVAR reduction, as required (R1). The Transmission Operator was not notified until December 14, 2009 that the Sithe Independence plant was operating off the AVC mode for almost ten hours on December 11, 2009 and December 12, 2009. Upon review of its logs, Dynegy identified six additional instances where when the Sithe Independence plant failed to timely notify its Transmission Operator of a change in its AVR status (R3.1).

Finding: NPCC and Dynegy entered into a settlement agreement to resolve multiple violations, whereby Dynegy agreed to pay a penalty of $50,000 and to undertake other mitigation measures. NPCC found that the VAR-002-1.1a violations posed a serious or substantial risk to bulk power system reliability since operating the AVR in voltage control mode is needed to properly maintain voltage on the bulk power system for real-time operation and post-contingency operation and the Sithe Independence plant may not have been able to respond automatically to maintain stability on its system. NPCC evaluated the six additional violations as an aggravating factor. The duration of the VAR-002-1.1a violations was from August 3, 2007 through May 1, 2010. In approving the settlement agreement, NERC found that these were Dynegy’s first violations of the Reliability Standards in the NPCC region; some of the violations were self-reported; Dynegy was cooperative during the enforcement process and did not conceal the violations; Dynegy had a compliance program in place (which was evaluated as a mitigating factor); and there were no additional aggravating or mitigating factors.

Penalty: $50,000 (aggregate for 8 violations)

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

E.ON U.S. Services Inc. for LG&E & KU, FERC Docket No. NP11-97-000 (January 31, 2011)

Reliability Standard: VAR-002-1.1a

Requirement: R2

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: SERC

Issue: E.ON U.S. Services Inc. for LG&E & KU (E.ON) submitted a self-report for failing to notify the Transmission Operator (TOP) of an excursion of certain peaking combustion turbines. The turbines were offline pursuant to a planned outage when they first began operating at about 1-2 kV above the allowed voltage schedule tolerance band. Because the units were offline, there was no need to notify the TOP. The station received a request, however, to operate some of the turbines for approximately four hours. The station did not have an alarm to notify plant operators that the turbine was coming on-line, invoking the duty to report the excursion to the TOP. Consequently, the excursion was not reported.

Finding: SERC found that the violation did not pose a serious or substantial risk to the reliability of the bulk power system because the excursion range was less than 2 kV outside of the tolerance band, and the bus voltage stayed in the same range before, during, and after the combustion turbines were on-line. NERC issued a Deficiency Notice of Penalty because the violation was minor in that the excursion was small and short-lived.

Penalty: $0

FERC Order: Issued March 2, 2011 (no further review)

Exelon Generation Company, LLC, FERC Docket No. NP11-153-000 (March 30, 2011)

Reliability Standard: VAR-002-1.1a

Requirement: R2

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: ReliabilityFirst

Issue: As a result of investigating a complaint, ReliabilityFirst requested that Exelon Nuclear, an operating unit of Exelon Generation Company, LLC (EGC), submit data providing evidence that it operated within its voltage schedule during July and August 2009. Upon review of the evidence submitted, ReliabilityFirst initiated a spot check of compliance with R2 of the Standard, and determined that Exelon Nuclear had on 31 occasions during the relevant time period failed to maintain voltage output at its Oyster Creek facility as required by its Transmission Operator. Duration of violation was July 24, 2009, when the first deviation occurred, through January 29, 2010 when the violation was mitigated.

Finding: ReliabilityFirst Enforcement determined that the violation did not pose a serious or substantial risk to the bulk power system because none of the deviations to the voltage schedule put the system at risk of instability or cascading outages. Further, the NERC BOTCC concluded the penalty appropriate because this was EGC's second violation of the Standard which ReliabilityFirst deemed to be an aggravating factor, Exelon Nuclear had a compliance program at the time of the violation that ReliabilityFirst deemed to be a mitigating factor, and EGC was cooperative during the investigation.

Penalty: $25,000

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

Frontera Generation Limited Partnership, FERC Docket No. NP11-266-000 (August 31, 2011)

Reliability Standard: VAR-002-1.1a

Requirement: R4

Violation Risk Factor: Lower

Violation Severity Level: Lower

Region: Texas RE

Issue: Frontera Generation Limited Partnership (Frontera) self-certified that it inadvertently missed a request for information regarding its generator step-up transformer from the Transmission Planner on one day. The requested information was provided approximately a month and a half late.

Finding: Texas RE found that the violation did not constitute a serious or substantial risk to the bulk power system because the late data related to system models and development of generator bus voltage and reactive power models; moreover, the information eventually provided was identical to what had been provided in prior years. Duration of violation was April 29, 2010 through June 9, 2010.

Penalty: $5,000

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

Indiana Municipal Power Agency, FERC Docket No. NP11-36-000 (November 30, 2010)

Reliability Standard: VAR-002-1.1a

Requirement: R2

Violation Risk Factor: Medium

Violation Severity Level: Moderate

Region: ReliabilityFirst

Issue: ReliabilityFirst determined that Indiana Municipal Power Agency ("IMPA"), as a Generator Operator, failed to maintain its generator voltage output at its Anderson Station as directed by the Transmission Operator, American Electric Power.

Finding: The NERC Board of Trustees Compliance Committee ("BOTCC") imposed a $22,000 penalty for this and other violations. In reaching this determination, the BOTCC considered the following facts: the violation constituted IMPA's first violation of the subject Reliability Standard; IMPA cooperated during the compliance enforcement process; IMPA self-reported two of the three violations; IMPA's compliance program; IMPA did not attempt to conceal a violation or intend to do so; the violation did not create a serious or substantial risk to the bulk power system; the violation occurred during the initial discretionary transition period; and there were no other mitigating or aggravating factors or extenuating circumstances.

Penalty: $22,000 (aggregate for multiple violations)

FERC Order: Issued December 30, 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-002-1.1a

Requirement: R2, 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 R2 and R3. LG&E & KU reported a violation of R2 because one 178 MW generator failed to maintain the TOP-required bus voltage schedule of 140 kV +/- 1 kV for one hour on May 28, 2010. Instead, the generator’s integrated average voltage operated at 141.769 kV. Prior to the week the violation occurred, the generator had not been in operation since September 2009. The duration of the violation of R3 was the one hour when the generator exceeded the tolerance in the TOP’s established schedule. LG&E & KU reported a violation of R3 because it failed to notify the TOP within 30 minutes after it restricted the reactive capability of a 525 MW coal-fired generator unit by 20% on account of a hydrogen cooler leak. The duration of the violation was from July 30, 2012, the date the generator’s reactive capability declined, to August 2, 2010, when LG&E & KU notified the TOP 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. The violation of R2 was mitigated by the short duration and small margin (.55%) of deviation. In addition, the generator represents only 5% of the approximately 3,500 MW of regulated generation in the immediate area, and therefore the capacity of the generator at issue would only have a small impact on area voltage. The violation of R3 was mitigated because the reduction in reactive output was only approximately 20% of the total reactive capability of the unit, and the unit maintained the same voltage schedule throughout the violation period. LG&E & KU also reported the change as soon as it confirmed the reduction.

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

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

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

Reliability Standard: VAR-002-1.1a

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: TRE

Issue: As a result of a self report, TRE determined Luminant Energy Company, LLC (LEC) was in violation of VAR-002-1.1a R3 because it did not notify its Transmission Operator of a change in status of its Power System Stabilizer associated with two generating units within 30 minutes of the change.

Finding: TRE assessed a $107,000 penalty for this and other violations. This violation posed a minimal risk, but did not pose a serious or substantial risk to the reliability of the Bulk Power System because LEC’s AVR system was set to control voltage in the event the PSS went out of service, and the TO reported that there were no voltage control issues. The NERC BOTCC determined this was LEC’s first occurrence of this type of violation; LEC self-reported one of the violations, LEC was cooperative; LEC had a compliance program, which RFC considered a mitigating factor; there was no evidence of any attempt or intent to conceal a violation; and there were no other mitigating or aggravating factors.

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

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

Ohio Valley Electric Corporation, Docket No. NP11-270 (September 30, 2011)

Reliability Standard: VAR-002-1.1a

Requirement: R1

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: RFC

Issue: Ohio Valley Electric Corporation (OVEC) submitted a Self-Report of VAR-0002-1.1a R3. RFC determined the violation was actually of R1 because OVEC failed to notify its TOP of the operation of a generator in manual voltage control mode when its AVR was not in service. The incident occurred on October 18, 2009.

Finding: RFC determined that the violations posed moderate risk, but did not pose a serious or substantial risk to the reliability of the BPS because OEVC manually controlled the voltage of the unit and maintained all issued voltage schedules. Moreover, the unit is at a station with five other similar generators that had working AVRs and could have compensated for any voltage variations.

Penalty: $15,000 (aggregate for 2 violations)

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

Optim Energy Marketing, LLC, FERC Docket No. NP11-257-000 (August 11, 2011)

Reliability Standard: VAR-002-1.1a

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: NA

Region: TRE

Issue: During an audit, TRE determined that Optim Energy Marketing, LLC (OEM), as GOP, did not report a change in reactive capability at a generator unit to the TOP within thirty minutes of the change. Improperly installed exciter brush holders prevented the unit from being able to offer voltage support to the TOP. Operator logs indicated the TOP was not notified until 3 hours after the event.

Finding: TRE assessed an $8,000 penalty for this violation. TRE determined that the violation posed a moderate risk but did not pose a serious or substantial risk to the reliability of the bulk power system (BPS) because a moderate amount of generation was involved (550 MW), and only a small amount of reactive power would have been requested by the TOP. OEM was engaged in obtaining and confirming the required information and communicated with the TOP as soon as that information was verified. In approving the settlement between OEM and TRE, the NERC BOTCC considered the following factors: the violation was OEM’s first violation of the Reliability Standard; OEM was cooperative; OEM had a compliance program at the time of the violation, which TRE considered a mitigating factor; there was no evidence of an attempt or intent to conceal the violation; TRE determined the violation did not pose a serious or substantial risk to the reliability of the BPS; there were no other aggravating or mitigating factors.

Penalty: $8,000

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

Pacific Gas and Electric Company, FERC Docket No. NP11-131-000 (February 28, 2011)

Reliability Standard: VAR-002-1.1a

Requirement: R3.1

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: WECC

Issue: WECC found that Pacific Gas and Electric Company (PG&E), as a Generation Owner, failed to notify its associated Transmission Operator within 30 minutes of a status or capability change on a power system stabilizer and the expected duration of the change in status or capability.

Finding: The NERC Board of Trustees Compliance Committee (NERC BOTCC) approved a penalty in the amount of $7,000 for this violation. In reaching this determination, the NERC BOTCC considered the following facts, among others: the violation constituted PG&E's first violation of the subject NERC Reliability Standard; PG&E cooperated during the compliance enforcement process; PG&E's compliance program; PG&E did not attempt to conceal a 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: $7,000

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

Pacific Gas and Electric Company, FERC Docket No. NP11-228-000 (June 30, 2011)

Reliability Standard: VAR-002-1.1a

Requirement: R2

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: WECC

Issue: In January 2011, Pacific Gas and Electric Company (PG&E) self-reported that, at its Gateway generating facility, it did not maintain the generator voltage that was mandated by its Transmission Operator from 9 pm to 10 pm on April 30, 2010.

Finding: WECC found that the violation only constituted a minimal risk to bulk power system reliability since the Gateway generating facility (which has a total capacity of 681 MVA) only represents a small percentage of PG&E’s generating capacity and of the generation available to the Transmission Operator. The violation occurred on April 30, 2010.

Penalty: $2,000

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

Panda Brandywine LP, Docket No. NP11-270 (September 30, 2011)

Reliability Standard: VAR-002-1.1a

Requirement: R2

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: RFC

Issue: During a compliance audit, RFC determined that Panda Bradywine LP (Panda) violated R2 because it did not maintain its TOP’s default voltage schedule on various occasions without first receiving an exemption.

Finding: RFC determined that the violations posed a moderate risk to the reliability of the BPS but did not pose a serious or substantial risk to the reliability of the BPS because Panda operated in accordance with a power purchase agreement and interconnection agreement with its TOP. Moreover, Panda’s AVR were in automatic mode at all times and Panda continually monitored voltage, amps, frequency, and real and Reactive Power at the Panda facility. The violation lasted from February 25, 2008 to December 15, 2010.

Penalty: $50,000 (aggregate for 4 violations)

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

Sierra Pacific Power Company, Docket No. NP13-33 (April 30, 2013)

Reliability Standard: VAR-002-1.1a

Requirement: 3

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: WECC

Issue: In October 2010, Sierra Pacific Power Company (SPPC), as a GOP, self-reported that its Power System Stabilizer (PSS) at its North Valmy Station Unit 1 was out of service from July 20, 2010 through July 26, 2010 and SPPC did not report this change in status to its TOP within 30 minutes as required. Once the SPPC operator noticed the PSS was not in service, he notified the TOP and returned the PSS to service.

Finding: WECC found that this violation constituted only a minimal risk to BPS reliability. All of SPCC’s other generating units (which represent 88% of the SPPC system) had their PSS in service during the course of the violation. Thus, if North Valmy Station Unit 1 started to swing, the PSS on SPPC’s other generation units would be able to protect the SPPC system. SPPC neither admitted nor denied the violation. WECC determined that SPPC had an effective compliance culture in place.

Total Penalty: $16,400 (aggregate for 5 violations)

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

Simpson Tacoma Kraft Co., LLC (STK), Docket No. NP12-40 (July 31, 2012)

Reliability Standard: VAR-002-1.1a (R1); VAR-002-1.1b (R3)

Requirement: R1; R3

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: WECC

Issue: After reviewing STK’s Self-Report and Self-Certification submitted on July 15, 2011 and September 2, 2011, respectively, WECC determined that STK violated both VAR-002-1.1a R1 and VAR-002-1.1b R3. Regarding VAR-002-1.1a R1, STK failed to operate its generator with the AVR in automatic voltage control mode and did not notify its TOP that it was operating in power factor mode. Regarding VAR-002-1.1b R3, STK failed to notify the TOP within 30 minutes of the change in AVR control mode status, as required by the Standard. STK, a GO, began commercially operating its generator on July 1, 2009. The design for the generator controls included an AVR, but did not provide for use of the AVR in automatic voltage control mode. Consequently, the generator operated in power factor control mode through June 1, 2011, when a unit outage forced implementation of controls that allowed the AVR to operate in automatic voltage control mode. STK’s generator came back online in automatic voltage control mode on June 7, 2011 at 13:20 PDT, but STK failed to notify the TOP of the change in AVR control mode status until July 1, 2011. STK violated VAR-002-1.1a R1 from July 1, 2009 through June 7, 2011 for failing to operate its generator with the AVR in automatic voltage control mode. Thereafter, STK violated VAR-002-1.1b R3 from June 7, 2011 to July 1, 2011 in failing to alert the TOP within 30 minutes of the switch to AVR after the plant restarted.

Finding: WECC determined both violations posed only a minimal risk to BPS reliability for two reasons. First, STK always operated within the voltage schedule established by its TOP. Second, the steam turbine generator is the only unit at its plant, and its output, 55 MW, is relatively small compared to the other generation integrated into the grid in the immediate area by the TOP. STK agreed/stipulated to WECC’s findings.

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

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

Southern California Edison – Power Procurement Business Unit, FERC Docket No. NP11-34-000 (November 30, 2010)

Reliability Standard: VAR-002-1.1a

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: WECC

Issue: WECC determined that Southern California Edison – Power Procurement Business Unit ("SCEP"), as a Transmission Operator, did not issue a directive in a clear, concise and definitive manner and did not ensure the recipient of the directive repeated the information back correctly.

Finding: The NERC Board of Trustees Compliance Committee ("BOTCC") imposed a $28,000 penalty for this and other violations. In assessing the penalty, the BOTCC considered the following facts: the violation constituted SCEP's first violation of this Reliability Standard; SCEP self-reported the violation; SCEP cooperated during the compliance enforcement process; SCEP's compliance program; SCEP 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: $28,000

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

Tennessee Valley Authority, Docket No. NP12-27 (May 30, 2012)

Reliability Standard: VAR-002-1.1a

Requirement: R1, R3 (3.1)

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: SERC

Issue: SERC determined that a Tennessee Valley Authority (TVA) operator removed the AVR for the Johnsonville Unit 1 from service and operated the unit manually from December 13, 2009 until January 14, 2010, but did not notify its TOP as required (R1, R3).

Finding: SERC found that the violations constituted a minimal risk to BPS reliability since the relevant generating unit only consisted of 101 MW (out of the total 1,275 MW capacity at the Johnsonville generating station). During the incident, the other generating units at Johnsonville were operating in automatic voltage control mode and fed into the same switchyard as Unit 1 (thereby providing voltage support at the interconnection). In addition, TVA followed the assigned voltage schedule throughout the period when the AVR was being operated manually. The duration of the violations was from December 13, 2009 through January 14, 2010. SERC evaluated TVA’s compliance program as a mitigating factor.

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

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

T.E.S. Filer City Station Limited Partnership, FERC Docket No. NP11-214-000 (June 29, 2011)

Reliability Standard: VAR-002-1.1a

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: Moderate

Region: RFC

Issue: In April 2010, T.E.S. Filer City Station Limited Partnership (T.E.S.), as a Generator Owner, self-reported that it did not notify, within 30 minutes, its Transmission Operator in two instances when it was operating its automatic voltage regulator (AVR) in manual mode. On August 4, 2008, it waited 5 hours and 34 minutes after the AVR status change to notify the Transmission Operator and on April 5, 2010 it waited 34 minutes.

Finding: RFC and T.E.S. entered into a settlement agreement to resolve multiple violations, whereby T.E.S. agreed to pay a penalty of $25,000 and to undertake other mitigation measures. RFC found that the VAR-002-1.1a violation did not constitute a serious or substantial risk to bulk power system reliability since T.E.S. was always operating its AVR within the acceptable voltage ranges during the status changes. The VAR-002-1.1a violation occurred on August 4, 2008 and April 5, 2010. In approving the settlement agreement, NERC found that these were T.E.S.’ first violations of the relevant Reliability Standards (even though T.E.S.’ affiliates had previous violation of PRC-005-1 which was viewed as an aggravating factor); T.E.S. was cooperative during the enforcement proceeding and did not conceal the violations; and there was a compliance program in place (which was evaluated as a mitigating factor).

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

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

The Detroit Edison Company, FERC Docket No. NP13-5 (October 31, 2012)

Reliability Standard: VAR-002-1.1a

Requirement: 2

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: RFC

Issue: During a March 2011 compliance audit, RFC determined that the Detroit Edison Company's (Detroit Edison) Harbor Beach Unit 1 exceeded its voltage schedule (by 0.3 kV) on January 12, 2011. In addition, for two hours on July 17, 2010 and two hours on July 18, 2010, Detroit Edison's Hancock CTG unit provided excess MVARs to its system than was called for by its generator reactive power schedule

Finding: Detroit Edison admitted the VAR-002-1.1a R2 violation. RFC found that the violation constituted a moderate risk to BPS reliability since the violation could have caused generator voltage or reactive output that would be damaging to the BPS. On January 12, 2011, the Harbor Beach Unit 1 was providing additional reactive support during the evening-on-peak hours and had relatively minimal excess voltage. In regards to the Hancock CTG unit, there is less risk to the BPS in providing additional reactive power than in providing less reactive power than is scheduled. The Hancock CTG unit also has alarms that are triggered when the bus voltage is outside the operating limits. RFC evaluated parts of Detroit Edison's compliance program as a mitigating factor. Detroit Edison's cooperation was also considered as a mitigating factor. But, Detroit Edison had a prior ACP violation of VAR-002-1 R3, which RFC viewed as an aggravating factor.

Penalty: $24,000 (aggregate for 6 violations)

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

Wisconsin Public Service Corporation, FERC Docket No. NP11-104-000 (February 1, 2011)

Reliability Standard: VAR-002-1.1a

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: MRO

Issue: Wisconsin Public Service Corporation (WPSC) self-reported a violation of VAR-002-1.1a, R3.1 because it failed to notify its associated Transmission Operator (TOP) within 30 minutes of a status change on its automatic voltage regulator (AVR) for its Weston 1 plant. WPSC also found two other AVR issues at its Crane Creek wind farm plant. One beginning on February 4, 2010 and ending on September 28, 2010 and another 24-second instance on October 20, 2010.

Finding: MRO determined the violation posed a minimal risk to the reliability of the bulk power system because the WPSC system operators maintained the units within the TOP's voltage schedule even though the AVR was not in automatic control for the Weston 1 plant. And, even though the Weston 1 plant is connected to a 345 kV line, the Weston 3 plant, which is approximately 325 MW, was also connected to the system and was providing automatic voltage regulation. In addition, the Crane Creek wind farm is a 99 MW facility in a rural location in Iowa. MRO also considered the size and location of the facilities.

Penalty: $0

FERC Order: Issued March 3, 2011 (no further review)