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

NERC Case Notes: Reliability Standard VAR-STD-002b-1

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AES Alamitos LLC, FERC Docket No. NP10-2-000 (October 14, 2009)

Reliability Standard: VAR-STD-002b-1

Requirement: R1

Violation Risk Factor: N/A

Violation Severity Level: Not provided

Region: WECC

Issue: In July 2008, AES Alamitos self-reported that it had run one of its generators without power system stabilizers for six days (even though it had not received an exemption to do so).

Finding: WECC found that this violation did not involve a serious or substantial risk to the bulk power system reliability since AES Alamitos and its Balancing Authority were in close communications and it was the Balancing Authority that noticed that the generator was not using its power system stabilizers. In addition, AES Alamitos self-reported the violation; this was AES Alamitos' first violation of this Reliability Standard; and it completed a mitigation plan.

Penalty: $0

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

Colorado Energy Management – BCM, Docket No. NP10-69-000 (March 1, 2010)

Reliability Standard: VAR-STD-002b-1

Requirement: WR1

Violation Risk Factor: N/A

Violation Severity Level: Level 4 Non-Compliance

Region: WECC

Issue: In August 2008, Colorado Energy Management – BCM (CBCM) self-reported a possible violation of Regional Reliability Standard VAR-STD-002b-1 since the Power System Stabilizers (PSS) at CBCM's newly acquired Malburg Generating Station had not been fully installed and therefore were not in service. After acquiring the facility, CBCM discovered that, despite the representations of the previous operators, all of the PSS were not fully installed and operational, and therefore not in service at all times. The PSS at Malburg Generating Station were out of service for over 150 days.

Finding: WECC found that the violation did not constitute a serious or substantial risk to the bulk power system since the Malburg Generating Station only operates at 134 MW and no system disturbances were caused. WECC determined that the violation was CBCM's first violation of this Regional Reliability Standard; the violation was self-reported; CBCM was cooperative and did not attempt to conceal the violation; and CBCM demonstrated a positive compliance culture by self-reporting the violation along with its application for NERC registration. Based on the Sanction Table contained in the Regional Reliability Standard, CBCM received a $2,000 penalty and the issuance of a Letter B (which informs CBCM's CEO of the non-compliance, as well as other governing entities upon request for such information). CBCM has successfully completed a Mitigation Plan.

Penalty: $2,000

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

Griffith Energy, LLC, FERC Docket No. NP12-10 (December 30, 2011)

Reliability Standard: VAR-STD-002b-1

Requirement: WR1

Violation Risk Factor: N/A

Violation Severity Level: N/A

Region: WECC

Issue: Griffith self-reported that the Power System Stabilizer (PSS) control for a Steam Turbine Generator was in the OFF position rather than ON as it should have been. Based on the report, WECC found that Griffith, as a GO, did not ensure its STG PSS was in service at all times as required for the purpose of providing grid frequency support.

Finding: WECC found the violation constituted a minimal risk to BPS reliability since Griffith did have its two combustion turbines’ PSSs were properly set to ON during the violation period and the violation did not result in a system overload. Also, WECC noted that the size of the generator involved, 250 MW, lessened the risk to the BPS. Data reviewed by Griffith showed that no abnormalities occurred during the violation period. WECC took the following under consideration when determining the appropriate penalty amount: the violation posed minimal risk; the violation was self-reported; and there were no aggravating factors.

Penalty: $500

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

Griffith Energy, LLC, FERC Docket No. NP12-10 (December 30, 2011)

Reliability Standard: VAR-STD-002b-1

Requirement: WR1

Violation Risk Factor: N/A

Violation Severity Level: N/A

Region: WECC

Issue: Griffith self-reported that the Power System Stabilizer (PSS) control for a Steam Turbine Generator was in the OFF position rather than ON as it should have been. Based on the report, WECC found that Griffith, as a GO, did not ensure its STG PSS was in service at all times as required for the purpose of providing grid frequency support.

Finding: WECC found the violation constituted a minimal risk to BPS reliability since Griffith did have its two combustion turbines’ PSSs were properly set to ON during the violation period and the violation did not result in a system overload. Also, WECC noted that the size of the generator involved, 250 MW, lessened the risk to the BPS. Data reviewed by Griffith showed that no abnormalities occurred during the violation period. WECC took the following under consideration when determining the appropriate penalty amount: the violation posed minimal risk; the violation was self-reported; and there were no aggravating factors.

Penalty: $500

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

Unidentified Registered Entity, FERC Docket No. NP11-175-000 (April 29, 2011)

Reliability Standard: VAR-STD-002b-1

Requirement: WR1

Violation Risk Factor: N/A

Violation Severity Level: N/A

Region: WECC

Issue: In July 2009, the Unidentified Registered Entity (URE) self-reported that it had improperly operated its generator without a Power System Stabilizer (PSS) for 12 hours on June 30, 2009 (as the PSS was not enabled during the start-up of the generator).

Finding: WECC and the URE entered into a settlement agreement to resolve multiple violations, whereby the URE agreed to pay a penalty of $32,000 and to undertake other mitigation measures. WECC found that the violation of VAR-STD-002b-1 only constituted a minimal risk to bulk power system reliability since the PSS was only out of service for 12 hours. In addition, the relevant generator was only in service for 84 hours that calendar quarter. The URE continued to follow the voltage and reactive schedules when the PSS was out of service, and took corrective action and notified the appropriate entities when it realized the PSS was not in operation. The VAR-STD-002b-1 violation was on June 30, 2009. In approving the settlement agreement and the penalty determination, NERC considered the fact that the violations were the URE’s first violations of the relevant Reliability Standards; some of the violations were self-reported; the URE was cooperative during the enforcement process and did not conceal the violations; the URE had a compliance program in place (which was evaluated as a mitigating factor); and there were no additional aggravating or mitigating factors.

Penalty: $32,000 (aggregate for 6 violations)

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

Unidentified Registered Entity, FERC Docket No. NP11-218-000 (June 29, 2011)

Reliability Standard: VAR-STD-002b-1

Requirement: WR1

Violation Risk Factor: N/A

Violation Severity Level: N/A

Region: WECC

Issue: WECC found that the Registered Entity’s Power System Stabilizer (PSS) at one of its generators came off-line, but it took a month for the Registered Entity to return that PSS to service.

Finding: WECC and the Registered Entity entered into a settlement agreement to resolve multiple violations, whereby the Registered Entity agreed to pay a penalty of $130,000 and to undertake other mitigation measures. WECC found that the VAR-STD-002b-1 violation constituted only a minimal risk to bulk power system reliability since the Registered Entity was able to maintain a stable operating environment at the generator during the time the PSS was off-line. In addition, the relevant generator (which was only rated at 44.5 MVA) only accounted for a small part of the Registered Entity’s available generation and an even smaller percentage of the generation available throughout the Western Interconnection. The duration of the VAR-STD-002b-1 violation was from November 18, 2009 through February 24, 2010. In approving the settlement agreement, NERC found that there were three instances of noncompliance with Regional Reliability Standard PRC-STD-005-1 WR1 (which was evaluated as an aggravating factor); some of the violations were self-reported; the Registered Entity was cooperative during the enforcement process and did not conceal the violations; the Registered Entity had a compliance program in place (which was evaluated as a mitigating factor); the penalties for the violations of Reliability Standards EOP-001-0 R6 and EOP-005-1 R2 were aggregated since both penalties were based on a single act of noncompliance; the penalties for the violations of Reliability Standards PRC-STD-005-1 WR1 and VAR-STD-002b-1 WR1 were based on the respective Sanction Tables; and there were no additional aggravating or mitigating factors.

Penalty: $130,000 (aggregate for 27 violations)

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