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

NERC Case Notes: Reliability Standard VAR-002-1a

White & Case NERC Database

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.

Dynegy Inc., FERC Docket No. NP11-266-000 (August 31, 2011)

Reliability Standard: VAR-002-1a

Requirement: R1, R3

Violation Risk Factor: Medium

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

Region: SERC

Issue: Dynegy, Inc. (Dynegy) self-reported that it did not operate its generator in the automatic voltage control mode and failed to notify its Transmission Operator as required by R1 and R3 on three different occasions, each of which was for a duration of less than 30 seconds. While previous violations of R2 were settled with Dynegy in an earlier settlement agreement, SERC determined that the facts were different and the mitigation plan adopted in the earlier settlement could not have prevented the current violations.

Finding: SERC found that the violation did not constitute a serious or substantial risk to the bulk power system because the total duration of all three events was less than one minute; the unit maintained its voltage schedule within the bounds of the Interconnection and applicable operating agreement; only one unit was involved; and the Transmission Operator did not communicate any directives or report any reliability issues during the violation period. Duration of violation was less than one day.

Penalty: $5,000 (aggregate for 2 violations)

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

Nevada Power Company (NEVP), FERC Docket No. NP12-5 (November 30, 2011)

Reliability Standard: VAR-002-1a

Requirement: R3

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: WECC

Issue: While performing an on-site Compliance Audit in March 2011, WECC found that NEVP, as a GOP, was in violation of VAR-002-1a R3. While reviewing a Power System Stabilizer outage report, WECC discovered that, for a period of approximately 60.5 hours, NEVP was not aware that its PSS had not engaged upon start-up. Once NEVP discovered the problem, it notified its TOP, however, all changes to the status of the PSS must be reported to the TOP within 30 minutes.

Finding: The violation was found to pose a minimal risk to BPS reliability because the PSS was operating correctly on the majority of the NEVP system, 97%, which would protect both NEVP's system and the BPS. Also, WECC noted the limited time that the PSS was not operating as required. In determining the appropriate penalty, WECC considered NEVP's internal compliance program (ICP) as a mitigating factor.

Penalty: $2,000

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

PacifiCorp (PAC), Docket No. NP12-44-000 (August 31, 2012)

Reliability Standard: VAR-002-1a

Requirement: 3/3.1

Violation Risk Factor: Medium

Violation Severity Level: Moderate

Region: WECC

Issue: PAC self-reported in December 2008 that, as a GOP, it had not notified its TOP of a change in status to its Automatic Voltage Regulator (AVR) within 30 minutes, as required, on three occasions.

Finding: The violation was deemed by WECC to pose minimal risk to BPS reliability because PAC is both the GOP and TOP. Even though a documented notice was not provided, the TOP knew of the AVR status change.

Penalty: $0 (for 4 violations)

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

Southern California Edison – Power Procurement Business Unit (SCEP), Docket No. NP13-12-000 (December 31, 2013)

Reliability Standard: VAR-002-1a

Requirement: 3; 3.1

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: WECC

Issue: SCEP, as a GOP, submitted a self-report in September 2011 stating that it failed to notify the CAISO, its TOP, within 30 minutes of changes in status of nine of its generators in violation of VAR-002-1a R3/R3.1. This included failure to notify CAISO within 30 minutes of changes that included the installation of new Power System Stabilizer (PSS) components, the testing of these components, and the commissioning of these newly installed PSS components.

Finding: This violation posed a minimal risk, but not a serious or substantial risk to BPS reliability. The generators in question represent only 12% of SCEP’s active generation. Further, SCEP installed these PSS devices on a staggered schedule that lessened the risk that loss of a single generator would trigger other effects on system operations. Finally, Automatic Voltage Regulator systems remained in use during the installation of the new PSS components. In determining the appropriate penalty, WECC gave credit to SCEP’s compliance history and its self-reporting the violation. WECC found the SCEP’s ICP grants oversight staff access to senior management, is regularly reviewed and modified, and includes self-auditing procedures. The ICP is widely circulated among SCEP employees. However, WECC also noted that SCEP had violated VAR-002-1.1a R3 on a prior occasion, but ultimately the violations occurred under distinct circumstances, and SCEP did not repeat the same errors.

Total Penalty: $2,000

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

Tampa Electric Company (TEC), Docket No. NP12-44-000 (August 31, 2012)

Reliability Standard: VAR-002-1a

Requirement: 3/3.1

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: FRCC

Issue: TEC, in its role as a GOP, self-reported in November 2011 that on 10 occasions involving three plant sites it had not informed its TOP "as soon as practical" of the expected duration of time it would be running the automatic voltage regulator (AVR) in manual mode rather than automatic mode. One AVR was in manual mode for 12 days without the TOP being notified.

Finding: The violation was deemed to pose moderate risk to BPS reliability because of the following. First, the TOP monitors the status of generators through the energy management system. Second, TEC notified the TOP that the AVR was in manual mode; however, the expected duration of the change in status was not given. Finally, a moderate risk was assessed because the violation involved 10 separate instances between 2009 and 2011 at three different plant sites. In determining the appropriate penalty, FRCC considered TEC's internal compliance program as a mitigating factor. TEC neither admitted to nor denied FRCC's findings.

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

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

Unidentified Registered Entity, FERC Docket No. NP11-79-000 (December 22, 2010)

Reliability Standard: VAR-002-1a

Requirement: R3/3.1

Violation Risk Factor: Medium

Violation Severity Level: Lower/Moderate

Region: FRCC

Issue: Unidentified Registered Entity (URE) self-reported two violations of VAR-002-1a for failing to notify its Transmission Operator within 30 minutes of a change in status of a unit's power system stabilizer and a change in an AVR's status.

Finding: The violations did not pose a serious or substantial threat to the reliability of the bulk power system because the URE's relevant unit power system stabilizer was in service the entire time the unit was online, and only one CT generator was affected. The other combustion turbine generator power system stabilizers were in service. With respect to the AVR, the URE's SCADA alarm sounded when the AVR changed status and alerted the TOP, who was able to perform a contingency analysis and verify that there was no risk to the bulk power system in having the AVR offline.

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

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

Wheelabrator Millbury Inc., FERC Docket No. NP11-228-000 (June 30, 2011)

Reliability Standard: VAR-002-1a

Requirement: R3.1

Violation Risk Factor: Medium

Violation Severity Level: Moderate

Region: NPCC

Issue: Wheelabrator Millbury Inc. (Wheelabrator) self-reported that it did not notify its Transmission Operator within 30 minutes, as required, when, as a result of a lightening strike, the automatic voltage regulator (AVR) at its generator changed from automatic to manual control mode.

Finding: NPCC found that the violation only constituted a minimal risk to bulk power system reliability since the generator's voltage stayed within normal limits even when the AVR was operating in manual mode. The duration of the violation was from May 8, 2010 through May 10, 2010.

Penalty: $4,000

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