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

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

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American Electric Power Service Corporation, Docket No. NP12-27 (May 30, 2012)

Reliability Standard: VAR-002-1.1b

Requirement: R1, R3

Violation Risk Factor: Medium (R1, R3)

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

Region: RFC

Issue: In September 2011, American Electric Power (AEP), as a GOP, self-reported that on May 9, 2011, an operator who was starting up AEP’s Kammer Unit 2 was unsuccessful in switching the AVR from manual control mode to automatic voltage control mode. AEP did not notify its TOP, as required, that it would not be operating the AVR in automatic mode. (R1) Kammer Unit 2 was operating for six hours and 45 minutes with its AVR in manual mode before another operator noticed the alarm and switched the AVR into automatic voltage control mode. AEP did not notify its TOP, as required, of the AVR status change. (R3)

Finding: RFC found that the VAR-002-1.1b violations constituted a moderate risk to BPS reliability. But, the risk was mitigated since the violation involved the high pressure AVR control switch of Kammer Unit 2 (as the operator was able to place the low pressure AVR control switch of Kammer Unit 2 into automatic voltage control mode). In addition, Kammer Unit 2 was able to maintain its voltage schedule. AEP had also installed alarms to trigger when the AVR is not in automatic voltage control mode and, as a result, another operator placed the high pressure AVR control switch back into automatic voltage control mode. The violations occurred on May 9, 2011. RFC considered as mitigating factors certain aspects of AEP’s compliance program, the violations being self-reported and the cooperation provided by AEP.

Penalty: $34,000 (aggregate for 4 violations)

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

Arizona Public Service Company (AZPS), Docket No. NP13-8-000, November 30, 2012

Reliability Standard: VAR-002-1.1b

Requirement: R3; R3.1

Violation Risk Factor: Medium

Violation Severity Level: High

Region: WECC

Issue: AZPS, as a GOP, self-reported a violation of R3 to WECC when it failed to provide its TOP with notification of a change in the Automatic Voltage Regulator (AVR) status within 30 minutes of the change. In particular, AZPS's Power System Stabilizer (PSS) tripped, causing an alarm to notify a technician of the event. The wording of the alarm failed to notify the technician that the AVR was operating in manual rather than automatic mode, and as a result, the PSS was not operating. Therefore, the technician was not immediately aware that the AVR status had changed. When the technician became aware of the fact, the TOP was notified, albeit 72 minutes past the 30-minute required window for notification.

Finding: WECC determined that the R3 violation posed a minimal risk to the reliability of the BPS because during the time that the AVR and PSS at AZPS's Ocotillo Steam Unit 1 were operating in manual mode, the plant's other three units were operating properly. These other units could thus react to system deviations. Furthermore, although having AVRs within generator voltage regulators operate in manual mode may reduce the margins of stable operation for the generative facility in unstable conditions, AZPS had stable conditions on the date at issue. WECC and AZPS entered into a settlement agreement to resolve the violation, whereby AZPS agreed to pay a penalty and to undertake other mitigation measures to come into compliance with R3. WECC considered AZPS's compliance culture, reflected by its timely self-reporting and submission of a Mitigation Plan, to be mitigating factors in making its penalty determination, and AZPS's previous noncompliance to be an aggravating factor in the determination. The violation occurred on June 30, 2012. AZPS does not contest the R3 violation.

Penalty: $1,000

FERC Order: Issued December 28, 2012 (no further review)

Arizona Public Service Company (AZPS), Docket No. NP13-39-000 (May 30, 2013)

Reliability Standard: VAR-002-1.1b

Requirement: 3; 3.1

Violation Risk Factor: Medium

Violation Severity Level: High

Region: WECC

Issue: AZPS self-reported a violation of VAR-002-1.1b on October 12, 2012. AZPS violated this standard in its capacity as GOP when it failed to notify within 30 minutes its TOP of a Power System Stabilizer (PSS) status change. When bringing online a steam turbine for combined cycle unit #4, generation operations received alarms for the unit on the Continuous Environmental Monitoring System. The shift supervisor looked into the cause of the alarm and corrected it, and the unit’s power level was enough to bring online the PSS. The PSS failed to come online however, and, due to simultaneous environmental alarms, AZPS was late in confirming the status change of the PSS even though it reported to the operations technician that the PSS was offline. The operations technician did not inform its TOP of the status change, until after the confirmation and nearly two hours after a status change of the PSS. After this incident, AZPS investigated whether the PSS may have not alarmed in other instances. AZPS found that the operations technician did not report to the TOP an earlier occasion when the PSS failed to come online, as the technician felt he met VAR-002-1.1b R3.1 requirement to bring the PSS online within 30 minutes which would not necessitate TOP notification.

Finding: WECC found that the violation posed a minimum, but not a serious or substantial, risk to bulk power system reliability, which was moderated by such factors as the combined cycle generator involved is rated at less than 25 MW. The involved CC4 unit has similarly low output (22 MW in June, 19 MW in September). The system’s other generating resources maintained functioning PSSs. Finally, operations staff, upon discovering the PSS was off-line, placed the PSS online without further delay. In determining the appropriate penalty, WECC credited AZPS’s Internal Compliance Program (ICP) as a mitigating factor. The ICP is widely disseminated to operations staff, receives adequate resources, is regularly reviewed and modified, and maintains its independence from staff responsible for NERC reliability standard compliance. The ICP provides for periodic self-auditing and discipline for employees responsible for reliability standards violations. The ICP oversight staff has independent access to the board and CEO. This was AZPS’s third violation of VAR-002-1.1 b R3, which was an aggravating factor in the penalty determination.

Total Penalty: $20,000

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

Beech Ridge Energy LLC (Beech Ridge), Docket No. NP12-22-000 (March 30, 2012)

Reliability Standard: VAR-002-1.1b

Requirement: R1, R3

Violation Risk Factor: Medium

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

Region: RFC

Issue: Beech Ridge, in May 2011, self-reported a violation of VAR-002-1.1b because on April 28, 2011, its wind facility, with a generating capacity of 100.5 MW, lost power while its TOP was conducting scheduled maintenance, and when the system was restored, the Automatic Voltage Regulator was incorrectly set to the not enabled position. Beech Ridge determined that it operated outside of automatic voltage control mode for five hours on April 28, 2011 and for eight hours on April 29, 2011, the hours between when the facility came back on-line after the TOP maintenance and when the AVR was found to be set incorrectly. Because the TOP was not informed that the Beech Ridge AVR was not in automatic voltage control mode, Beech Ridge was found to have violated the VAR-002-1 R1 Reliability Standard. Regarding R3, based on the circumstances above, Beech Ridge did correct the issue – at 15:30 on April 29, 2011, but it did not notify its TOP until 11:04 on April 30, 2011, outside of the time requirement to notify its TOP within 30 minutes of an AVR status change.

Finding: The violation posed a moderate risk to BPS reliability because Beech Ridge was not consistently monitoring the status of its AVR, meaning it would be unable to comply with any TOP instructions; however, no requests to change voltage were submitted during the relevant period. RFC also considered that facility is wind powered, which is intermittent in nature, and any loss of voltage support would not have a significant impact on the system. In determining the appropriate penalty, RFC considered Beech Ridge’s Internal Compliance Program as a mitigating factor and also that the violations were self-reported. Beech Ridge was cooperative during the enforcement process. RFC stated that although Beech Ridge had no previous Reliability Standards violations, an affiliate of Beech Ridge in the WECC region had a violation of VAR-002-1 R1.

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

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

Calpine Energy Services, FERC Docket No. NP11-199-000 (May 26, 2011)

Reliability Standard: VAR-002-1.1b

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: WECC

Issue: Calpine Energy Services (CAES) self-reported that when its synchronized its Eagle Rock generation facility Unit 11 to the bulk power system on November 13, 2010 and its control room operator was unable to place the Power System Stabilizer (PSS) into service, it did not notify the Transmission Operator of the capability change of the PSS within 30 minute of the unit system being synchronized with the bulk power system as required. CAES did not notify the Transmission Operator until 1 hour and 40 minutes afterwards.

Finding: WECC and CAES entered into a settlement agreement to resolve the violation, whereby CAES agreed to pay a penalty of $1,000 and to undertake other mitigation measures. WECC found that the violation only posed a minimal risk to bulk power system reliability since the relevant generating unit only accounted for 4% of CAES’ generating capacity and a smaller portion of the total generation capacity available to the Transmission Operator. In addition, the incident occurred while bringing the generating unit online after a planned shutdown and, during the process, CAES’ operator followed the appropriate voltage schedules and returned the PSS to operation as soon as possible. The violation occurred on November 13, 2010.

Penalty: $1,000

FERC Order: Issued June 24, 2011 (no further review)

ConocoPhillips Company, FERC Docket No. NP11-181-000 (April 29, 2011)

Reliability Standard: VAR-002-1.1b

Requirement: R1, R3

Violation Risk Factor: Medium

Violation Severity Level: Moderate

Region: TRE

Issue: ConocoPhillips Company (ConocoPhillips) self-reported that on two instances in December 2009 (one lasting 25 minutes and one lasting 6 minutes) it was not operating its Sweeny Cogeneration combustion turbine Unit 1 in automatic voltage control mode and had not reported this change in the Automatic Voltage Regulator (AVR) status to its Transmission Operator (R1 and R3).

Finding: ConocoPhillips and TRE entered into a settlement agreement to resolve the violations, whereby ConocoPhillips agreed to pay a penalty of $5,000 and to undertake other mitigation measures. TRE determined that the violation only constituted a minimal risk to bulk power system reliability since the relevant turbine is only 90 MW and the AVR was only out of automatic voltage control mode for a short time. The operator at the relevant unit was monitoring the voltage, and the Transmission Operator did not report any voltage issues during those times. The violations occurred on December 3, 2009 and on December 4, 2009.

Penalty: $5,000

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

Consumers Energy Company (Consumers), Docket No. NP12-40 (July 31, 2012)

Reliability Standard: VAR-002-1.1b

Requirement: R2

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: RFC

Issue: On January 9, 2012, Consumers, as a GOP, self-reported to RFC that it violated VAR-002-1.1b R2 in failing to maintain the generator voltage output as directed by the TOP. Consumers’ two generating units, units #1 and #2, each interconnect to the BPS at 138 kV and generate respective capacities at 255 MW and 260 MW. Consumers’ normal practice is to operate the units consistent with the voltage schedule provided by its TOP. At 7:01 AM on November 10, 2011, pursuant to its regular schedule, Consumers was directed to change the voltage output of both of its units to 145 kV. Consumers, despite visual and audio alarms directing the operator to change voltage, continued to operate at 142-143 kV until 10:58 AM. The operator failed to notice the alarms because he was monitoring the status of the switching substation as part of the start-up of the second generating unit. The duration of the violation was limited to the nearly four hours Consumers operated its generators outside the voltage schedule.

Finding: This violation posed only a moderate risk to BPS reliability because the risk was mitigated by four factors. First, Consumers had additional generators available to provide voltage or reactive support. Second, Consumers’ Automatic Voltage Regulator was functioning in automatic mode during the violation. Third, Consumers was operating less than 5% outside its required voltage schedule, decreasing the chances of compromising BPS voltage. Fourth, Consumers had both audible and visual alarms in the control room to alert its operators to change to the proper voltage. Consumers admitted to RFC’s findings. In determining the appropriate penalty, RFC considered aspects of Consumers’ internal compliance program and compliance history as mitigating factors. As an aggravating factor, RFC considered Consumers’ compliance history, including self-reported violations of VAR-002 R1 and R3.

Penalty: $2,500

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

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

Reliability Standard: VAR-002-1.1b

Requirement: 2

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: Texas RE

Issue: Duke Energy, as a GOP, self-reported on May 27, 2011 a violation of VAR-002-1.1b R2. Duke Energy’s TOP directed its Renewables Monitoring center to drop the voltage level at the Notrees Wind Farm (NWF) by 2 kV. Duke Energy complied, lowering the voltage set point from 141 kV to 139 kV. Fifteen seconds after the operated pressed the “apply” button on the Wind Farm Management Systems screen to lower the set point, the “change” button was pressed, causing the voltage control mode to change from “voltage set point control” to “power factor control.” This change caused the voltage control mode to change from voltage control to power factor control, and the site output voltage, which was already high, to rise rather than lower. Before Duke Energy realized the error, a Special Protection System (SPS) signal was given by the TOP to isolate NWF.

Finding: Texas RE found that the violation posed a moderate risk to BPS reliability, but not a serious or substantial risk. TOP action was required after Duke Energy failed to follow the voltage profile so that the transmission circuit breakers would open, cutting the wind farm off from the rest of the BPS. But proper procedures were in place so that the TOP could send a signal to the SPS, isolating the NWF, and limiting the voltage entering the BPS. In determining the appropriate penalty and approving the settlement agreement, Texas RE considered Duke Energy’s actions to address the issue and prevent recurrence: Duke Energy: (1) transferred its wind operations desk to an automated facility with 24/7 monitoring; (2) reviewed the automation of its wind turbine controls; (3) required its generation dispatchers to complete ERCOT’s computer-based training program; (4) required its generation dispatchers to review and sign off on its telephone communication procedure; and (5) updated its energy management system (EMS), which incorporated electronic notifications.

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

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

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

Reliability Standard: VAR-002-1.1b

Requirement: R1; R3/3.1

Violation Risk Factor: Medium (both)

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

Region: RFC

Issue: During a Compliance Audit in May 2011, RFC determined that EcoGrove, as a GOP, was in violation of VAR-002-1.1b R1 and R3 based on its failure to notify its TOP (i) that is was not operating one of its generator’s AVR in the automatic voltage control mode; and (ii) within 30 minutes of an AVR status change and the anticipated duration of the change.

Finding: The violations were determined to pose a minimal risk to BPS reliability because EcoGrove was manually maintaining the correct voltage per its voltage schedule. EcoGrove did notify its TO of the status change, but not its TOP, due to a misunderstanding of the notification requirements. EcoGrove’s TO was aware that the AVR was being operated manually. In determining the appropriate penalty, RFC considered EcoGrove’s internal compliance program in effect during the violation period to be a mitigating factor. RFC considered that the violations were all discovered during a Compliance Audit and not through self-reports so no mitigating credit was applied. Further mitigating factors were EcoGrove’s cooperation and timely submittal of a Mitigation Plan.

Penalty: $2,000 (aggregate for 3 violations)

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

El Dorado Energy, LLC, FERC Docket No. NP11-228-000 (June 30, 2011)

Reliability Standard: VAR-002-1.1b

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: WECC

Issue: In November 2010, El Dorado Energy, LLC (ELDE) self-reported that while recovering from a steam turbine trip on one of its generators on October 19, 2010 in which its automatic voltage regulator (AVR) did not boot up in automatic voltage control mode, it did not notify its Transmission Operator, as required, within 30 minutes of the status change of its steam turbine AVR and the expected duration of this change. As ELDE was troubleshooting its AVR, it did not inform its Transmission Operator of the status change until over an hour after the AVR started to be operated in manual mode.

Finding: WECC found that the violation only constituted a minimal risk to bulk power system reliability since the relevant generating facility only represents a fraction of ELDE’s generating capacity (78 MW out of 490 MW) and of the total generation available to the Transmission Operator. In addition, while the AVR was in manual control mode, ELDE’s operator followed the appropriate voltage schedule and worked promptly to fix the issue. The violation occurred on October 19, 2010.

Penalty: $1,000

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

EP Ocean Peaking Power, LLC (Ocean Peaking), Docket No. NP13-5-000 (October 31, 2012)

Reliability Standard: VAR-002-1.1b

Requirement: R1

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: RFC

Issue: Following a Compliance Audit, RFC determined that Ocean Peaking, a GOP, was operating its generator automatic voltage regulator in manual VAR control mode, rather than in automatic voltage control mode, and had failed to notify the TO in violation of R1.

Finding: RFC determined that the R1 violation posed a moderate risk to the reliability of the BPS since Ocean Peaking operated the generator voltage regulator in automatic VAR mode following a reactive output set point, rather than manual VAR mode, and Ocean Peaking's internal bus and generator voltages were regularly monitored and adjusted to ensure operating conditions were safe and efficient. RFC and Ocean Peaking entered into a settlement agreement to resolve multiple violations, whereby Ocean Peaking agreed to pay a penalty and undertake mitigation measures to come into compliance with R1. RFC considered Ocean Peaking's internal compliance program and cooperation during the enforcement activities as mitigating factors in making its penalty determination. However, the mitigating effect of Ocean Peaking's internal compliance program was decreased by the program's failure to promptly detect the violation. RFC found that Ocean Peaking's compliance history was not an aggravating factor. The duration of the violation was from August 28, 2008 through March 2, 2012. Ocean Peaking admits the R1 violation.

Penalty: $30,000 (aggregate for 6 violations)

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

EP Ocean Peaking Power, LLC (Ocean Peaking), Docket No. NP13-5-000 (October 31, 2012)

Reliability Standard: VAR-002-1.1b

Requirement: 2

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: RFC

Issue: Following a Compliance Audit, RFC determined that since installing its data storage device Ocean Peaking (a GOP) had deviated from the generator voltage schedule established by its TOP on a few instances, and that prior to the installation of the data storage device, the company could not prove its compliance with the schedule established by the TOP. As a result, Ocean Peaking employed a broader range for its voltage schedule and surpassed the acceptable range established by the TOP on several occasions. RFC also learned that Ocean Peaking was employing an equivalent low side voltage for the high side generator interconnection, thus creating the possibility of further deviation from their TOP's voltage schedule.

Finding: RFC determined that the violation of R2 posed a moderate risk to the reliability of the BPS because Ocean Peaking had been following the default schedule provided by its TOP, even if it had not followed the TOP's specific voltage schedule. RFC also noted that the company had been operating within the bounds of its internal bus voltage and generators, and the company would have been immediately alerted by a local TOP if its station voltage had affected the BPS. RFC and Ocean Peaking entered into a settlement agreement to resolve multiple violations, whereby Ocean Peaking agreed to pay a penalty and to undertake other mitigation measures to come into compliance with R2. RFC considered Ocean Peaking's internal compliance program, cooperation during the enforcement activities, and prompt volunteering of additional facts relevant to the discovered violations as mitigating factors in making its penalty determination. However, the mitigating effect of Ocean Peaking's internal compliance program was decreased by the program's failure to promptly detect the violation. RFC found that Ocean Peaking's compliance history was not an aggravating factor. The duration of the violation was from August 28, 2008 to August 31, 2012. Ocean Peaking admits the R2 violation.

Penalty: $30,000 (aggregate for 6 violations)

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

Exelon Generation Company, LLC, FERC Docket No. NP11-245-000 (July 28, 2011)

Reliability Standard: VAR-002-1.1b

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: RFC

Issue: In January 2010, Exelon Generation Company, LLC (Exelon Generation), as a Generator Operator, self-reported that on December 3, 2009 it did not notify PJM Interconnection, LLC, its Transmission Operator, within 30 minutes when the Automatic Voltage Regulator (AVR) #22 at its Eddystone Unit 2 tripped to manual mode as a result of a malfunction of an under voltage relay rectifier circuit.

Finding: RFC and Exelon Generation entered into a settlement agreement to resolve the violation, whereby Exelon Generation agreed to pay a penalty of $10,000 and to undertake other mitigation measures. RFC found that the violation did not constitute a serious or substantial risk to bulk power system reliability since the AVR #21 (the second AVR unit in Eddystone Unit 2) remained in automatic mode during the violation and would have been able to appropriately compensate for any voltage variances. During the violation, Exelon Generation maintained the voltage of Eddystone Unit 2 within the mandated voltage schedule. The violation occurred on December 3, 2009. In approving the settlement agreement, NERC found that Exelon Generation Company, LLC – Exelon Nuclear, an affiliate of Exelon Generation, had prior violations of VAR-002-1 R1 and VAR-002-1.a R2 (which was evaluated as an aggravating factor); the violation was self-reported; Exelon Generation was cooperative during the enforcement process and did not conceal the violation; Exelon Generation had a compliance program in place (which was evaluated as a mitigating factor); and there were no additional aggravating or mitigating factors.

Penalty: $10,000

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

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

Reliability Standard: VAR-002-1.1b

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: High

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. Once the unit was brought back online on August 24, 2011, the AVR mode was changed correctly, however, FP did not notify its TOP of the change in AVR status until September 7, 2011. The Standard requires changes in AVR to be reported to the TOP within 30 minutes.

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)

GenOn California 2 (GCAII), Docket No. NP12-36-000 (June 30, 2012)

Reliability Standard: VAR-002-1.1b

Requirement: R1, R3

Violation Risk Factor: Medium (both)

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

Region: WECC

Issue: GCAII submitted two self-certifications on September 20, 2011, reporting possible violations of VAR-002-1.1b R1. WECC review of the self-certifications confirmed that GCAII, as a GO, was not operating its Mandalay generating unit #2 in automatic voltage control mode during unit start up, when the mode was manual. During this period, GCAII operators did not notify the TO of the change in mode, in violation of R1. As well, GCAII violated the R3 requirement to notify the TO of any change in status within 30 minutes of changes in voltage control mode.

Finding: WECC deemed the violation to pose minimal risk to BPS reliability because during the relevant events, the unit was operating below its rating of 215 MW and the time periods when the unit was in manual mode were short – 28 minutes and one minute. WECC also considered the small amount of generation involved compared to that available to the plant and the TO. GCAII did not contest WECC’s findings.

Penalty: $1,500 (aggregate for two violations)

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

High Desert Power Project, LLC, FERC Docket No. NP11-202-000 (June 29, 2011)

Reliability Standard: VAR-002-1.1b

Requirement: R1

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: WECC

Issue: In March 2010, High Desert Power Project, LLC (HDPP), as a Generator Operator, self-reported that its VAR control button had been activated since the plant commenced operations in 2003 (and therefore it was not operating its generating units in automatic voltage control mode and failed to notify its Transmission Operator of this fact).

Finding: WECC and HDPP entered into a settlement agreement to resolve the violation, whereby HDPP agreed to pay a penalty of $9,000 and to undertake mitigation measures. WECC found that the violation only posed a minimal risk to bulk power system reliability since HDPP was actually operating in VAR mode and, through the duration of the violation, did not receive any reports regarding voltage stability issues from the Transmission Operator. The duration of the violation was from August 2, 2007 through February 15, 2010. In approving the settlement agreement, NERC found that this was HDPP’s first violation of this Reliability Standard; the violation was self-reported; HDPP was cooperative during the enforcement proceeding and did not conceal the violation; and there were no additional aggravating or mitigating factors.

Penalty: $9,000

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

Los Angeles Department of Water and Power (LADWP), Docket No. NP-12-40 (July 31, 2012)

Reliability Standard: VAR-002-1.1b

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: WECC

Issue: After reviewing LADWP’s Self-Report submitted on November 9, 2010, WECC determined that LADWP was in violation of VAR-002-1.1b R3 because it failed to timely notify the TOP of a change in status of the AVR within 30 minutes of the change. On September 30, 2010, at approximately 09:08 hours, Unit 3 at LADWP’s Castaic Power Plant, with its AVR in service, was not maintaining a set voltage of 17.6 kV, but swinging between 17.3 kV and 17.6 kV. To stabilize the voltage at 17.6 kV, LADWP’s GOP disabled the AVR by switching to Current Control. Because this was an immediate unavoidable removal, WECC did not pursue an R1 violation. LADWP did, however, commit a violation when it failed to report the status change within 30 minutes of switching to Current Control. Instead, LADWP waited until October 7, 2010 to notify the TOP. The duration of the violation was from September 30, 2010 to October 7, 2010.

Finding: This violation posed only a minimal risk to BPS reliability for three reasons. First, although Unit 3 operated without the AVR for approximately one week, LADWP had to change the status of the AVR to ensure the unit could maintain a stable voltage output. Second, as soon as LADWP realized the set-point was undulating, LADWP took immediate action to maintain a reliable set-point. Third, the violation relates to a small amount of generation available to the GOP and to an even lesser extent, to the TOP. To illustrate, Unit 3 has a rated capacity of approximately 250 MW, in comparison to the rated capacity of 1,250 MW for the entire Castaic Plant. LADWP agreed/stipulated to WECC’s findings. In determining the proper penalty, WECC considered LADWP’s internal compliance program as a mitigating factor.

Penalty: $60,000 (aggregate for five violations)

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

Los Angeles Department of Water and Power (LADWP), Docket No. NP12-47-000 (September 28, 2012)

Reliability Standard: VAR-002-1.1b

Requirement: 3

Violation Risk Factor: Medium

Violation Severity Level: High

Region: WECC

Issue: In May 2011, LADWP self-reported that, as a GOP, it was in violation of VAR-002-1.1b R3. Specifically, during a restart at the Middle Gorge Power Plant, the Automatic Voltage Regulator at LADWP's was set to automatic voltage control mode; however, the Power System Stabilizer remained in the "off" position. LADWP operators restored the PSS to an operating condition, but LADWP did not report the PSS capability change to its TOP within 30 minutes, as required, nor did it report the expected duration of the change in status or capability. WECC reported that the violation is LADWP's second violation of VAR-002 R3. The first violation was on June 28, 2011, when LADWP's Castaic Unit 3 did not notify the Transmission Operator of an AVR status change within 30 minutes.

Finding: The violation was deemed to pose minimal risk to BPS reliability because of the size of the Gorge Power Plant – three generating units with a capacity of 37.5 MW each. The subject unit represents a small percentage of the generation at the Plant, an even smaller percentage of LADWP's generation and yet a smaller percentage of the generation available to the TOP. Also, LADWP had more than 1,000 MW of contingency reserves available during the unit start-up and operation if needed. Due to the capacity of the Gorge Power Plant, adverse consequences resulting from the PSS being offline would have been extremely limited. In determining the appropriate penalty, WECC considered LADWP's Internal Compliance Program as a mitigating factor. However, the instant violation is LADWP's second violation of the VAR-002-1.1b R3 Reliability Standard, which was considered an aggravating factor. WECC found no other aggravating factors warranting a higher proposed penalty. LADWP neither admitted to nor denied WECC's findings.

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

FERC Order: Issued October 26, 2012 (no further review)

Louisville Gas and Electric Company and Kentucky Utilities Company, Docket No. NP13-33 (April 30, 2013)

Reliability Standard: VAR-002-1.1b

Requirement: 3

Violation Risk Factor: Medium

Violation Severity Level: High

Region: SERC

Issue: In February 2010, Louisville Gas and Electric Company and Kentucky Utilities Company (LG&E/KU), as a GOP, self-reported that it did not timely notify its TOP within 30 minutes of a change in the status of its AVR on January 24, 2012. LG&E/KU reported the change in status an hour and ten minutes after the change occurred. In addition, on other occasions, LG&E/KU had notified its TOP of a status or capability change on a generator Reactive Power resource, but did not report the expected duration of the change as required.

Finding: SERC found that this violation constituted only a minimal risk to BPS reliability since the change in status at issue was from manual to automatic voltage control mode (which is the required mode of operation). In addition, LG&E/KU notified the TOP of the change within an hour and ten minutes. LG&E/KU neither admitted nor denied the violation. LG&E/KU’s internal compliance program was viewed as a neutral factor. LG&E/KU had prior violations of VAR-002-1.1a R3 and VAR-002-1 R3, which was evaluated as an aggravating factor.

Total Penalty: $40,000 (aggregate for 6 violations)

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

Millennium Power Partners, LP, FERC Docket No. NP11-253-000 (July 29, 2011)

Reliability Standard: VAR-002-1.1b

Requirement: R3.1

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: NPCC

Issue: Following a Self-Report, NPCC determined Millennium Power Partners, LP (MPP) failed to notify the TO within 30 minutes of a change in status of an automatic voltage regulator (AVR) (from automatic to manual) on a combustion turbine. The TO was notified the following day.

Finding: NPCC assessed no penalty for the violation. NPCC determined that the violation posed a minimal risk but did not pose a serious or substantial risk to the reliability of the bulk power system because MPP’s control room operator maintained proper voltage manually during the 53 minutes the AVR was not in automatic mode. NERC approved the settlement in an Administrative Citation Notice of Penalty.

Penalty: $0

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

Northern California Power Agency, FERC Docket No. NP11-253-000 (July 29, 2011)

Reliability Standard: VAR-002-1.1b

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: WECC

Issue: Northern California Power Agency (NCPA) self-reported that its personnel did not notify the local Transmission Operator when it removed a Power System Stabilizer (PSS) from service until 33 minutes after the PSS was removed from service (three minutes late). Duration of violation was September 19, 2010.

Finding: WECC determined that the violation posed a minimal risk to the bulk power system because the required notification was only three minutes late and NCPA’s generating facility is small (only 54 MW). The Administrative Citation Notice also stated that the violation was self-reported, and noted the following mitigation activity: NCPA installed SCADA monitoring on the PSS and gave pertinent personnel refresher training on the reporting requirements in the standards.

Penalty: $500

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

Northern California Power Agency (NCPA), Docket No. NP12-22-000 (March 30, 2012)

Reliability Standard: VAR-002-1.1b

Requirement: R2

Violation Risk Factor: Medium

Violation Severity Level: Moderate

Region: WECC

Issue: During an internal review of procedures and data, NCPA found it was running two units 1-2 kV higher than the published generator voltage schedule with its TOP, Pacific Gas and Electric. NCPA failing to maintain the published generator voltage without having an exemption from PG&E was a violation of VAR-002-1.1b R2. NCPA, as a GO, self reported the possible violation on August 19, 2011.

Finding: The issue posed minimal risk to BPS reliability because even though the units’ actual voltage was 1-2 kV more than the published voltage, on the same day as the self report, PG&E was informed of the issue and found the generator voltage needed to be reissued to match the higher voltage. Also, no area voltage issues occurred during the time period the units deviated from the schedule. NCPA delayed completion of its mitigation plan by 57 days while it waited for PG&E to issue a new voltage schedule. No additional penalty was imposed for the delay and no other factors warranted an adjustment in the penalty amount.

Penalty: $500

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

PacifiCorp, Docket No. NP12-18 (February 29, 2012)

Reliability Standard: VAR-002-1.1b

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: Moderate

Region: WECC

Issue: After reviewing a self-report submitted by PacifiCorp, WECC determined that PacifiCorp, as a GOP, was in violation of VAR-002-1.1b R3 because it did not notify its TOP within thirty minutes of a PSS status change. PacifiCorp was in the process of installing a new Power System Stabilizer (PSS) on one of its units at Jim Bridger and during the testing period the PSS status was changed to “off” two times but Grid Operations was not notified of this change. The unit had seven starts and stops before the PSS was ready for service. During five starts, the unit did not reach the 90 MW threshold at which point the PSS would be required to be in service; however, on two of the starts, the 90 MW threshold was exceeded but the appropriate party was not notified that the device was not in service.

Finding: WECC found the violation constituted a minimal risk to BPS reliability because of the short duration and mitigating measures taken by PacifiCorp. Even though PacifiCorp did not notify the TOP of the PSS status change, possible impact to the BPS was limited. While the PSS was off and being commissioned, PacifiCorp ran its automatic voltage regulator systems. No other PSS systems on the remaining units at Jim Bridger experienced a status change requiring VAR-002-1.1b R3 reporting. In determining the appropriate penalty, PacifiCorp’s compliance program was considered a mitigating factor.

Penalty: $2,500

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

PPL Montana, LLC, FERC Docket No. NP12-2 (October 31, 2011)

Reliability Standard: VAR-002-1.1b

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: Moderate

Region: WECC

Issue: PPL Montana, LLC (PPLM), as a GOP, self-reported that, in two instances, it did not notify its associated TOP, as required, when the Power System Stabilizer on its Colstrip Steam Electric Station Unit No. 2 was out of service.

Finding: WECC found that the violation constituted only a minimal risk to BPS reliability since the Colstrip generating facilities consist of four generators and those other units were operating and capable of responding to any need for system damping during the times when Unit No. 2 was out of service. The duration of the first instance was from October 10, 2010 through October 12, 2010 and the second instance occurred on November 1, 2010. WECC evaluated PPLM’s compliance program as a mitigating factor. But, PPLM had a prior violation of this Reliability Standard, so this violation was assessed as a repeat violation, which is an aggravating factor.

Penalty: $14,000

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

PPL Montana, LLC (PPLM), Docket No. NP12-26-000 (April 30, 2012)

Reliability Standard: VAR-002-1.1b

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: High

Region: WECC

Issue: PPLM, a GOP, submitted a self-report detailing a violation of VAR-002-1.1b R3 based upon its failure to notify its TOP within 30 minutes of a status change on certain generating units. Specifically, five generating units, each 7 MW, tripped offline in October 2011 while PPLM’s system was experiencing high voltage problems, leaving the units unable to control voltage. Two of the units changed from Automatic Voltage Regulator (AVR) mode to Field Current Regulation (FCR) mode in order to protect two other units. PPLM’s operators did not realize the status change, and subsequently, the two units tripped offline. Operators brought the tripped units back online in FCR mode rather than AVR mode, as required. Once PPLM operators realized the issue, it was reported to the TOP.

Finding: The violation was found to pose a minimal risk to BPS reliability based upon the small amount of generation involved and the short time period the units were not in AVR mode (approximately 2.5 hours). No loss of load occurred when the units tripped offline. In determining the appropriate penalty, WECC considered PPLM’s internal compliance program as a mitigating factor; however, the instant violation was the third violation of the relevant Reliability Standard, which was considered an aggravating factor.

 

PPLM gave WECC information on possible violations of VAR-002 R1, R1 and R3 which were self-reported by PPLM’s affiliates in the SERC and RFC regions. WECC found the possible violations were not aggravating factors because the affiliates were operating under a separate compliance program. In addition, a self-report submitted by another affiliate discussed a violation that occurred on the same day as the instant violation.

Penalty: $4,000

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

Public Utility District no. 1 of Chelan County (CHPD), Docket No. NP12-18 (February 29, 2012)

Reliability Standard: VAR-002-1.1b

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: High

Region: WECC

Issue: After reviewing a self-report submitted by CHPD, WECC determined that CHPD, as a GOP and GO, was in violation of VAR-002-1.1b R3 because it did not notify its TOP within thirty minutes of a PSS status change. While a technician and plant operator were testing reactive power instability on a 25 MW unit, the unit was turned off for 10 minutes, but the TOP was not notified. When reviewing the operator logs the following week, CHPD discovered the change had occurred and reported it to the TOP, however, the thirty-minute window for reporting PSS status changes had passed.

Finding: WECC found the violation constituted a minimal risk to BPS reliability because the PSS on all other CHPD units were in service when the subject unit’s PSS was offline and the PSS on the remaining units, constituting 98.75% of the CHPD system, would protect the CHPD system and the BPS. Further, the relevant unit’s capacity is only approximately 25 MW out of a total generating capacity of 2,000 MW. As such, the violation is limited to a generating unit that represents approximately 1.25 percent of the generation available to CHPD. CHPD’s compliance program was considered a mitigating factor in determining the appropriate penalty.

Penalty: $8,000

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

Puget Sound Energy, Inc. (PSE), FERC Docket No. NP12-5 (November 30, 2011)

Reliability Standard: VAR-002-1.1b

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: High

Region: WECC

Issue: PSE self-reported that, as a GO, it was in violation of VAR-002-1.1b because of its failure to notify its TOP of a change in status to its PSS within 30 minutes. Upon further review, WECC found that PSE had between six and nine other instances of it not notifying its TOP of a change in status to the PSS.

Finding: The violation was found to pose minimal risk to BPS reliability. PSE reported that no impact to the BPS had occurred while the PSS was out of service, and all but one outage was for a short time period. Also, the PSS on PSE’s other turbine was operating and would have been available if system damping was required. In determining the appropriate penalty, WECC considered PSE’s internal compliance program as a mitigating factor.

Penalty: $10,900

FERC Order: Issued December 30, 2011 (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 Company Services, Inc. - Gen, Docket No. NP12-27 (May 30, 2012)

Reliability Standard: VAR-002-1.1b

Requirement: R3, R1

Violation Risk Factor: Medium (R3, R1)

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

Region: SERC

Issue: In November 2010, Southern Company Services, Inc. – Gen (SCS-Gen), as a GOP, self-reported that on October 26, 2010, as a result of a communication fault between the generator excitation control system and the turbine control system, an AVR at the McIntosh Generating Plant tripped from automatic to manual mode and stayed in manual mode for three hours. On October 28, 2010, the same AVR tripped from automatic to manual, with the AVR staying in manual for approximately 10 hours and 25 minutes, respectively. SCS-Gen did not notify its TOP of a change in status in the AVR within 30 minutes as required (R3). SCS-Gen operated its generator in a mode other than the automatic voltage control mode and did not notify its TOP (R1).

Finding: SERC found that the violations constituted a minimal risk to BPS reliability since the other generators at the McIntosh Generating Plant remained in automatic voltage control mode and were able to effectively control the voltage. SCS-Gen also maintained the assigned voltage schedule throughout the period the relevant AVR was not in automatic voltage control mode. The duration of the violation was from October 26, 2010 through October 28, 2010. SERC evaluated SCS-Gen’s compliance program as a mitigating factor. While these are repeat violations, SERC did not apply it as an aggravating factor since the violations were based on different facts and circumstances.

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

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

Southern Company Services, Inc. - Gen (SCS-Gen), Docket No. NP13-27, February 28, 2013

Reliability Standard: VAR-002-1.1b

Requirement: R3; R3.1

Violation Risk Factor: Medium

Violation Severity Level: High

Region: SERC

Issue: SCS-Gen, as a GOP, self-reported a violation of R3 after discovering that it had failed to notify it's TOP within 30 minutes of a status or capability change of its automatic voltage regulator (AVR), when its AVR tripped to manual mode and remained in manual mode for approximately 11 hours.

Finding: SERC determined that the R3 violation posed a minimal risk to the reliability of the BPS because the company had other units online in the area which could have covered for the unit at issue while it was in manual mode. Additionally, the AVR did not deviate from its established voltage schedule even in manual mode, and the TOP did not direct the plant operator to adjust voltage during the violation period. SERC and SCS-Gen entered into a settlement agreement to resolve the violation whereby SCS-Gen agreed to pay a penalty and to undertake other mitigation measures to come into compliance with R3. SERC considered SCS-Gen's internal compliance program to be a mitigating factor in making its penalty determination. The violation began 30 minutes after the AVR changed from "Auto" to "Manual" mode, and ended when the TOP was provided with notification. SGS-Gen admits the R3 violation.

Penalty: $5,000

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

Sunflower Electric Power Corporation, Docket No. NP12-21, March 30, 2012

Reliability Standard: VAR-001-1; VAR-002-1.1b

Requirement: 1 (VAR-001-1); 1, 2, 3 (VAR-002-1.1b).

Violation Risk Factor: Medium

Violation Severity Level: VAR-001-1 R1: Lower; VAR-002-1.1b: Severe (R1), Moderate (R2), High (R3)

Region: SPP

Issue: Sunflower Electric Power Corporation (“Sunflower”) submitted a self-report to SPP on April 1, 2011 reporting violations of VAR-001-1 R6 and VAR-002-1.1b R1 -3 because following a forced outage at its Holcomb Unit, it restarted the unit in manual mode instead of automatic voltage regulator (“AVR”) mode and failed to communicate the mode to its Transmission Operator (“TOP”). The voltage regulator was incorrectly placed in manual mode while the unit was offline, and the Holcomb Control Room Operator (CRO) and TOP assumed the unit was operating in AVR mode when it came back online. Moreover, because the unit was in manual mode, the Power System Stabilizer (“PSS”) defaulted to an inactive state. Over an hour after the unit came back online, the CRO realized the voltage regulator was in manual mode and switched it to AVR mode, but failed to notify the TOP. The excitation controls remained erratic, and the Manager Coal Operations then reported to the TOP that the Holcomb Unit would be switched back to manual mode to troubleshoot the issue.

Finding: SPP determined that the violations posed a minimal risk, but did not pose a serious or substantial risk to the reliability of the BPS because the duration of time that the TOP was unaware of the status of voltage regulation and the PSS was minimal and the voltage on Sunflower’s system was closely monitored by its SCADA system. The unit only deviated from its voltage schedule by less than 0.5 V for about two minutes, and the incident did not require any emergency action by the TOP. SPP found the duration of the violations was from 9:38 am on February 19, 2011, when the Holcomb Unit was brought back online in manual mode without notifying the TOP, through 11:18 am on February 19, 2011, when Sunflower switched the mode and notified it’s TOP of the change.

Penalty: $135,000 (aggregate for 16 violations)

FERC Order: Order Issued April 30, 2012 (no further action)

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

Reliability Standard: VAR-002-1.1b

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: SERC

Issue: SERC determined that Tennessee Valley Authority (TVA), as a GOP, did not timely notify its TOP within 30 minutes of a change in its AVR status. On March 10, 2011, as a result of a discrepancy between the bus sensing and the generator sensing potential transformers, the AVRs at Paradise Fossil Plant Unit 2A and 2B switched from automatic mode to manual mode. But, the TOP was not notified until approximately one hour and 22 minutes after the change occurred.

Finding: SERC found that the violation constituted a minimal risk to BPS reliability since TVA continued to maintain the unit voltage according to the voltage schedule while the AVRs were in manual mode. The change in status was also reported within an hour and a half. In addition, Paradise Fossil Plant Unit 1 remained online and operating in automatic voltage control mode. The violation occurred on March 10, 2011. SERC evaluated TVA’s compliance program as a mitigating factor. While this is a repeat violation, SERC did not view it as an aggravating factor because of the different facts and circumstances.

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

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

Unidentified Registered Entity (URE), Docket No. NP12-47-000 (September 28, 2012)

Reliability Standard: VAR-002-1.1b

Requirement: 3

Violation Risk Factor: Medium

Violation Severity Level: High

Region: WECC

Issue: URE submitted a self-report explaining a violation of VAR-002-1 R3 due to the fact that automatic voltage regulators (AVRs) for four generating units were mistakenly being switched out of voltage control mode when the generator operator selected the VAR control mode. URE found the cause to be a malfunction with the AVR's control system program which was intended to force the voltage control mode if the generator operator selected the VAR control mode. The malfunction with the control system program resulted in the generator operators unknowingly switching the AVRs out of voltage control mode. Since URE's generator operators were unaware that the AVR was switched out of voltage control mode, they did not notify the TOP of the change in AVR status in accordance with the requirement.

Finding: The violation was deemed to pose moderate risk to BPS reliability URE generators were operating the generating units pursuant to the TOP's voltage schedule. URE system studies indicate that the transmission system in the location of these generators is not voltage constrained or close to voltage instability. System studies have indicated that the system voltage in this area generally runs high, not low, because of the interconnection with another entity. In determining the appropriate penalty, URE was given credit for the self-report. URE's compliance program was considered a mitigating factor; however, URE's violation history was considered an aggravating factor.

Penalty: $65,000 (for 11 violations)

FERC Order: Issued October 28, 2012 (no further review)

Unidentified Registered Entity (URE), Docket No. NP13-16 (December 31, 2012)

Reliability Standard: VAR-002-1.1b

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: WECC

Issue: URE self-reported that on a single day, the power system stabilizer (PSS) at a particular facility was deactivated but returned to service later that same day. URE failed to notify its TOP within 30 minutes of the change in PSS status and expected outage duration, in violation of R3.

Finding: WECC decided the violation posted a minimal and not a serious or substantial risk to the reliability of the BPS because it involved only one PSS and the voltage on the relevant transmission line was monitored and controlled by the generating facility during the outage. Duration of violation was one day.

Total Penalty: $207,000 (aggregate for 12 violations)

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

Whiting Clean Energy, Inc. (WCE), Docket No. NP14-8 (Nov. 27, 2013)

Reliability Standard: VAR-002-1.1b

Requirement: 2

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: RFC

Issue: While conducting a Compliance Audit, RFC found that on two occasions, WCE, as a GOP, did not either maintain the generator voltage or Reactive Power output as the TOP directed or secure an exemption as required.

Finding: This violation was deemed to pose minimal risk to reliable BPS operations, but not serious or substantial risk. WCE units were operated in Automatic Voltage Regulator mode, and therefore any system voltage fluctuations would be responded to as needed. On the two occasions that were the subject of this violation, the TOP alerted WCE that it was operating outside of its voltage schedule, and WCE operators manually corrected the problem. In determining the appropriate penalty, RFC considered several factors, including that these violations were the first by WCE of the subject Reliability Standards; one violation was self-reported; WCE cooperated during the compliance enforcement process; and WCE has a compliance program in place and certain aspects were considered a mitigating factor by RFC. However, RFC determined that WCE’s performance during the Compliance Audit was an aggravating factor as WCE did not fully understand its responsibilities under NERC’s Reliability Standards nor even its own processes and procedures.

Total Penalty: $35,000 (aggregate for 7 violations)

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