NERC Case Notes: Reliability Standard FAC-008-3

American Electric Power Service Corporation (AEP), FERC Docket No. NP18-6 (January 31, 2018)

Reliability Standard: FAC-008-3

Requirement: R6

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: ReliabilityFirst

Issue: On October 21, 2016, AEP, a TO, Self-Reported a violation of FAC-008-3 R6. AEP identified the violation on March 22, 2016 during an upgrade construction project, recognizing that an inconsistency with the entity's Facility Ratings Methodology resulted in an inaccurate, higher rating for three transformer facilities. The facility ratings database did not account for two riser sections.  AEP notified PJM of the discrepancy, replaced the spans of tubing on April 14, 2016, and updated PJM databases on by May 11, 2016 in order to reflect the changes to the facilities equipment lists. Stemming from a human performance issue and a lack of verification controls to ensure proper ratings modeling, the violation spanned two years, of which two of the three transformers exceeded the reduced emergency rating 3.6 and 2.2 percent of the time, respectively; the third transformer did not exceed the rating at any point.

Finding: ReliabilityFirst found the violation constituted a moderate risk to BPS reliability and did not pose a serious or substantial risk to the BPS. Although not including the risers in the facility rating could have led to a deterioration of the equipment, the risk was mitigated due to the infrequency of the exceedance. Given that the loading on each of the three transformers varied, a potential equipment failure would not produce a substantial impact as the configuration of the station would allow electricity to flow through additional paths. The duration of the violation was from May 14, 2014 (when AEP energized the three transformers) through May 11, 2016 (when AEP corrected the facility rating following the replacement of the equipment). ReliabilityFirst considered the cooperation of AEP during the Settlement Agreement process as a mitigating factor due to the high degree of cooperation and transparency of AEP. ReliabilityFirst also considered prior noncompliance with FAC-008 R6, ultimately finding that the other violation was distinguishable from this violation and did not warrant consideration as an aggravating factor. AEP will review all applicable facilities as part of its current Mitigation Plan and implement new internal controls.

Penalty: No Penalty

FERC Order: Issued January 31, 2018 (no further review)

CCI Signal Hill LLC (CCI SH), FERC Docket No. NP15-29-000 (May 28, 2015)

Reliability Standard: FAC-008-3

Requirement: R1, R1.2

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: Texas RE

Issue: Texas RE, during a compliance audit, found that CCI SH's Facility Ratings documentation was not bifurcated up to the high side terminals of the main step up transformer. Additionally, CCI SH's Facility Ratings Methodology (FRM) used the gas turbines' firing temperature as the facility's most limiting equipment rating, which is an invalid Equipment Rating criterion.

Finding: Texas RE found that this issue, along with violations of FAC-008-1 R1, posed a moderate risk to BPS reliability because facility ratings affect system operating limits. Additionally, two of the plant's four units were Blackstart resources, and inaccurate facility ratings involving Blackstart units could delay restoration of firm load. However, during the violations period, CCI SH did not fail a Blackstart test, the plant's two other units had the ability to support the Blackstart, and CCI SH was contracted to supply only 3.4% of ERCOT's primary Blackstart capability. To mitigate the violation, CCI SH (1) created Equipment Ratings based on valid criteria, (2) created a Facility Rating based on characteristics that do not violate applicable Equipment Ratings, (3) hired a consultant to review CCI SH's internal compliance program, and (4) added an annual FRM review to its tracking and notification system.

Penalty: $50,000 (aggregate for 6 violations)

FERC Order: FERC approved the settlement on June 26th, 2015.

CCI Signal Hill LLC (CCI SH), FERC Docket No. NP15-29-000 (May 28, 2015)

Reliability Standard: FAC-008-3

Requirement: R2, 2.3

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: Texas RE

Issue: Texas RE, during a compliance audit, found that CCI SH did not have a "statement that a Facility Rating shall equal the most limiting applicable Equipment Rating of the individual equipment that comprises that Facility" in its Facility Ratings Methodology (FRM) document.

Finding: Texas RE found that this issue posed a moderate, but not a serious or substantial, risk to BPS reliability because facility ratings affect system operating limits. Additionally, two of the plant's four units were Blackstart resources, and inaccurate facility ratings involving Blackstart units could delay restoration of firm load. However, during the violations period, CCI SH did not fail a Blackstart test, the plant's two other units had the ability to support the Blackstart, and CCI SH was contracted to supply only 3.4% of ERCOT's primary Blackstart capability. To mitigate the violation, CCI SH (1) created Equipment Ratings based on valid criteria, (2) created a Facility Rating based on characteristics that do not violate applicable Equipment Ratings, (3) hired a consultant to review CCI SH's internal compliance program, and (4) added an annual FRM review to its tracking and notification system.

Penalty: $50,000 (aggregate for 6 violations)

FERC Order: FERC approved the settlement on June 26th, 2015.

CCI Signal Hill LLC (CCI SH), FERC Docket No. NP15-29-000 (May 28, 2015)

Reliability Standard: FAC-008-3

Requirement: R6

Violation Risk Factor: Medium

Violation Severity Level: Severe

Region: Texas RE

Issue: Texas RE, during a compliance audit, found CCI SH's facility ratings were inconsistent with its Facility Ratings Methodology (FRM). The FRM stated that gas turbines' firing temperature was the facility's most limiting equipment rating, but the FRM rated generators in MW and MVA. Also, CCI SH reported facility ratings to its Reliability Coordinator that were different than the ratings listed in the FRM.

Finding: Texas RE found that this issue, along with violations of FAC-009-1 R1, posed a moderate, but not a serious or substantial, risk to BPS reliability because facility ratings affect system operating limits. Additionally, two of the plant's four units were Blackstart resources, and inaccurate facility ratings involving Blackstart units could delay restoration of firm load. However, during the violations period, CCI SH did not fail a Blackstart test, the plant's two other units could have supported the Blackstart, and CCI SH was contracted to supply only 3.4% of ERCOT's primary Blackstart capability. To mitigate the violation, CCI SH (1) created Equipment Ratings based on valid criteria, (2) created a Facility Rating based on characteristics that do not violate applicable Equipment Ratings, (3) hired a consultant to review CCI SH's internal compliance program, and (4) added an annual FRM review to its tracking and notification system.

Penalty: $50,000 (aggregate for 6 violations)

FERC Order: FERC approved the settlement on June 26th, 2015.

City of Lake Worth (LWU), FERC Docket No. NP18-10 (April 30, 2018)

Reliability Standard: FAC-008-3

Requirement: R6

Violation Risk Factor: Medium

Violation Severity Level: High

Region: Florida Reliability Coordinating Council, Inc. (FRCC)

Issue: During a compliance spot check conducted by FRCC from February 27 to March 2, 2017, it was determined that LWU, as a GO and TO, was in violation of FAC-008-3 R6. FRCC identified that LWU did not establish Facility Ratings consistent with the associated Facility Ratings Methodology. The facility ratings database—comprised of the seven facilities owned by LWU, with 81 components in total—did not accurately identify the most limiting element for one of the seven facilities. LWU had not accounted for current transformers on the Hypoluxo to Main 138 kV line. FRCC found that the violation stemmed from insufficient documentation of individual component ratings; further, the physical condition of the nameplate data in the field had been adversely impacted due to age and corrosion (from exposure to the elements for many years).

Finding: FRCC found the violation constituted a minimal risk to BPS reliability and did not pose a serious or substantial risk to the BPS. By not including every component in the Facility Rating for that particular facility, LWU risked potential failure of the current transformers, misoperations, and equipment damage. The duration of the violation was from September 5, 2016 (when LWU failed to identify the transformers) through March 2, 2017 (when LWU updated all Facility Rating documents). FRCC found that the noncompliance history of LWU warranted consideration as an aggravating factor. Following the violation, LWU purchased asset management software and a third-party vendor to improve systematic tracking of NERC standards. LWU has now established a quarterly meeting schedule to discuss and review applicable deadlines and implementation measures.

Penalty: $60,000 (combined with other violations)

FERC Order: Issued April 30, 2018 (no further review)

Tampa Electric Company, FERC Docket No. NP16-20 (May 31, 2016)

Reliability Standard: FAC-008-3

Requirement: R8; R8.1

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: FRCC

Issue: Tampa Electric Company (TEC), a TO, Self-Reported a violation of FAC-008-3 R8 and R8.1.  TEC discovered that it did not maintain the bus voltage per the required schedule at Polk Power Station for a period of 7 hours and 30 minutes and that TEC’s operator failed to notify the TOP of deviations from the provided voltage schedule. 

On April 13, 2015, the Polk Power Station 230 kV bus dropped below the voltage schedule 238 kV lower limit during startup, which initiated a low bus voltage alarm that was acknowledged by the system operator.  Because none of the station’s units were online at the time, the station was exempt from maintaining the voltage schedule.  The voltage recovered to 238.1 kV, but the alarm did not reset because the voltage was still below the value necessary to reset the alarm.  The Polk Unit 4 and Polk Unit 2 combustion turbines were subsequently brought online with their AVRs set to automatic.  The station bus voltage subsequently dropped below 238 kV but the system operator did not notice because the alarm was obscured by other log entries.

Finding: FRCC found the violation posed a minimal risk to BPS reliability.  TEC’s generator voltage deficiency did not exceed 0.4 percent of the voltage schedule.  Moreover, the two generating units operated with their AVR in automatic mode during the period of the violation.  The duration of the violation was April 13, 2015 (when the Polk Power Station 230 kV bus dropped below the voltage schedule while CT 4 was online, at 11:05 a.m.) through April 13, 2015 (when the Polk Power Station 230 kV bus returned to the voltage schedule at 6:35 p.m.).  FRCC considered internal compliance program to be a mitigating factor.

Penalty: $4000

FERC Order: Issued May 31, 2016 (no further review)

Tampa Electric Company (TEC), FERC Docket No. NP15-29-000 (May 28, 2015)

Reliability Standard: FAC-008-3

Requirement: R8

Violation Risk Factor: Medium

Violation Severity Level: Lower

Region: FRCC

Issue: FRCC, during a compliance audit, found that in two instances TEC did not re-rate a facility or provide its Reliability Coordinator (RC) with proper notification through an inter-control center communications protocol.

Finding: FRCC found that this issue posed a moderate, but not a serious or substantial, risk to BPS reliability. Because the RC model had incorrect ratings data, the RC might not have operated appropriately. However, during the two instances maximum flow was 15% and 9% of the revised limits. These low percentages show the risk was not substantial. To mitigate the violation penalty, TEC (1) added a step to the process for planned switching requiring the energy system operator (ESO) to update ratings, (2) installed alarms which remind ESOs to check ratings when the possibility for de-rating arises, and (3) trained ESOs on the FAC-008-3 R8 requirement.

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

FERC Order: FERC approved the settlement on June 26th, 2015.

NP18-16-000: Board of Public Utilities (Kansas City KS)

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NP19-12-000: Consolidated Edison Co of NY, Inc. (CEOCNY)

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NP20-20-000: Electric Transmission Texas, LLC (ETT)

Region: TRE

Issue: FAC-008-3

On December 18, 2018, ETT submitted a Self-Report stating that, as a Transmission Owner (TO), it was in violation of FAC-008-3 R6. Specifically, for five Transmission Facilities, ETT did not have Facility Ratings that are consistent with its Facility Ratings methodology.

ETT discovered that five Transmission segments had incorrect Facility Ratings as a result of an extent of condition review performed by an affiliate to mitigate a separate instance of noncompliance.
On October 31, 2018, ETT documented revised Facility ratings for the five Transmission segments at issue. Specifically, for four Transmission segments, the normal and emergency ratings, which are equal, were revised from 2,987 MVA to 2,331 MVA for two segments; from 1,250 MVA to 717 MVA for one segment; and from 1,322 MVA to 717 MVA for one segment. In addition, for the fifth Transmission segment, the normal rating was unchanged, at 478 MVA, but the emergency rating was reduced from 631 MVA to 572 MVA.

The root cause of this noncompliance was an insufficient process for compliance with FAC-008-3 R6. Regarding four of the Transmission segments at issue, ETT failed to identify the most limiting series element (MLSE). Regarding the fifth Transmission segment at issue, ETT failed to revise the line's Facility Rating after adopting a revised Facility Rating methodology that would have required a lower Emergency Rating for the segment.

This violation began on May 23, 2016, when the first of the Transmission segments at issue was placed into service, and ended on October 31, 2018, when ETT documented revised Facility Ratings for the Transmission Facilities at issue.

Finding: FAC-008-3

This violation posed a moderate risk and did not pose a serious or substantial risk to the reliability of the bulk power system (BPS). Incorrect Facility Ratings could result in errors in planning and operation of the BPS and may affect System Operating Limits. This issue affected five Transmission segments that are operated at 345 kV for over two years, and the change in the documented Facility Ratings was significant. Specifically, the change in normal ratings ranged from 22% to 46% and the changes in emergency ratings ranged from 9% to 62%. However, the risk posed by this issue was reduced by the following factors. First, ETT is a moderately sized TO, with approximately 4,800 MW of interconnected generation. Second, ETT noted that during the incident time periods, the loading on the Transmission lines at issue never exceeded the corrected Facility Ratings. Additionally, ETT noted that there are other, more limiting branches around several of the Transmission Facilities at issue that would make it impossible to exceed the corrected Facility Ratings for those Facilities. Finally, the Transmission Facilities at issue represented a small proportion of ETT's Transmission Facilities, out of a total of 27 Transmission lines operated at 138 kV and 40 Transmission lines operated at 345 kV.

Penalty: $0

FERC Order: Issued July 30, 2020

NP19-15-000: Greenridge Generation LLC

Region: NPCC

Issue: FAC-008-3

On September 5, 2018, Greenridge Generation LLC (the Entity) submitted a Self-Report stating that, as a Generator Owner (GO), it was in violation with FAC-008-3 R1. Specifically, the Entity did not have a documented methodology for determining facility ratings for its generator equipment. The violation started on March 29, 2017, when the Entity first synchronized with the grid and was registered with NERC after recommissioning, and concluded on November 1, 2017, when the Entity developed and documented a facility rating methodology in accordance with FAC-008-3R1. The violation was discovered after the entity hired a third-party company to help them evaluate and implement a compliance program. The root cause of this violation was a lack of awareness of several NERC Reliability Standard requirement obligations as the plant was being recommissioned. In particular, the Entity did not incorporate amendments to the NERC Reliability Standards into its compliance program. Therefore, certain requirements were not reviewed, assessed, or implemented when the Entity recommissioned the Facility.

Finding: FAC-008-3

This violation posed a minimal risk and did not pose a serious or substantial risk to the reliability of the bulk power system (BPS). An entity with an undocumented facility ratings methodology could result in equipment damage and/or loss of equipment life. There were no issues during the violation period due to exceeding equipment capabilities, and the Entity operated according to interconnection agreements with its interconnection Transmission Owner that identified the capabilities of the facility. No harm is known to have occurred as a result of this violation.

Issue: MOD-025-2

On October 22, 2018, Greenridge Generation LLC (the Entity) submitted a Self-Report stating that, as a Generator Owner (GO), it was in noncompliance with MOD-025-2 R2. Specifically, the Entity did not perform the necessary Reactive Power capability testing required by MOD-025-2 R2 at its plant within twelve calendar months of commercial operation, and therefore was unable to provide its Transmission Planner with verification of its Reactive Power capability. The plant became commercial on March 27, 2017. The noncompliance started on April 1, 2018, twelve calendar months after the Entity's commercial operation date, and concluded on March 29, 2019, when the Entity provided its Reactive Power capability test results to its Transmission Planner. The actual Reactive Power capability testing took place on June 6, 2018. There was a delay in acquiring the test report from the electrical contractor. The root cause of this violation was a lack of awareness of several NERC Reliability Standard requirement obligations as the plant was being recommissioned. In particular, the Entity did not incorporate amendments to the NERC Reliability Standards into its compliance program. Therefore, certain requirements were not reviewed, assessed, or implemented when the Entity recommissioned the Facility.

Finding: MOD-025-2

This noncompliance posed a minimal risk and did not pose a serious or substantial risk to the reliability of the bulk power system (BPS). The potential risk due to noncompliance with MOD-025-2 R2 is the Transmission Planner having inaccurate information about the generating units when developing planning models to assess BPS reliability. No harm is known to have occurred as a result of this noncompliance.

Penalty: $10,000

FERC Order: Issued July 31, 2019

NP19-18-000: International Boundary and Water Commission, US Section

Region: NPCC

Issue: FAC-008-3

During a Compliance Audit conducted from February 16, 2016 through June 16, 2016, Texas RE determined that the Entity, as a Generator Owner (GO), was in noncompliance with FAC-008-3 R1. Specifically, during the Compliance Audit, the Entity was unable to provide any documentation described by FAC-008-3 R1 for determining the Facility Ratings of its generator Facilities. The root cause of this issue is that the Entity did not have any documented process for compliance with FAC-008-3 beginning from the date when it was registered as a GO. As a result, the Entity did not document or implement processes necessary for compliance with FAC-008-3 R1. The noncompliance started on November 19, 2013, when the Entity was registered as a GO, and ended on November 27, 2018, when the Entity implemented a documented process that includes a documented methodology, Facility Ratings, and relevant documentation necessary for compliance with FAC-008-3 R1, R2, and R6.

Finding: FAC-008-3

This issue posed a moderate risk and did not pose a serious or substantial risk to the bulk power system (BPS) based on the following factors. A lack of accurate Facility Ratings and Equipment Ratings could result in overloading on equipment, potentially damaging the affected Facilities, and resulting in unanticipated outages. The Entity's Facilities produce power intermittently and are not relied on in planning cases for reliability or capacity purposes during peak summer conditions. These Facilities are also not located inside a major load center, and the potential unavailability of the Facilities would be unlikely to cause a loss of load or interfere with Transmission flows. Finally, the unit information in the Resource Asset Registration Form already on file with the Electric Reliability Council of Texas, Inc. was consistent with the Facility Ratings documentation created by the Entity to end this noncompliance. No harm is known to have occurred.

Issue: CIP-002-5.1

The Entity submitted a Self-Certification stating that it was in noncompliance with CIP-002-5.1 R1. Specifically, the Entity did not have or implement a process that considers for the purposes of CIP-002-5.1 R1, Parts 1.1 through 1.3. As a result, the Entity did not identify each asset that contains a BES Cyber System. This issue began when CIP-002-5.1 became enforceable and continued after CIP-002-5.1a R1 became enforceable. The root cause of this issue is that the Entity did not have any documented process for compliance with CIP-002-5.1 during the period leading up to CIP-002-5.1 becoming enforceable. As a result, the Entity did not document or implement processes necessary for compliance with CIP-002-5.1. This noncompliance started on July 1, 2016, when CIP-002-5.1 R1 became enforceable and is currently ongoing.

Finding: CIP-002-5.1

This issue posed a moderate risk and did not pose a serious or substantial risk to the bulk power system based on the following factors. The failure to properly identify and classify a BES Cyber System increases the potential that the BES Cyber System will not receive the appropriate cyber security protections.

Penalty: No Penalty

FERC Order: Issued September 26, 2019