City of Austin dba Austin Energy, FERC Docket No. NP11-95-000 (January 31, 2011)
Reliability Standard: IRO-001-1
Requirement: R8
Violation Risk Factor: High
Violation Severity Level: Not provided
Region: TRE
Issue: Texas RE determined that City of Austin dba Austin Energy (Austin Energy), as a Generator Operator, failed to comply with a Reliability Coordinator directive issued on March 10, 2008, specifically ERCOT ISO’s request to maintain generation at or below 38 MW at Whirlwind Energy.
Finding: The NERC Board of Trustees Compliance Committee (NERC BOTCC) approved a Settlement Agreement, including Texas RE’s assessment of a $50,000 financial penalty. In reaching this determination, the NERC BOTCC considered the following facts: the violation constituted Austin Energy’s first violations of this NERC Reliability Standard; Austin Energy cooperated during the compliance enforcement process; Austin Energy’s compliance program; Austin Energy did not attempt to conceal a violation or intend to do so; the violation did not create a serious or substantial risk to the bulk power system and there were no other mitigating or aggravating factors or extenuating circumstances..
Penalty: $50,000
FERC Order: Issued March 2, 2011 (no further review)
Duke Energy Generation Services, Inc. (Duke Energy), Docket No. NP13-12-000 (December 31, 2012)
Reliability Standard: IRO-001-1
Requirement: 8
Violation Risk Factor: High
Violation Severity Level: Moderate
Region: Texas RE
Issue: While conducting a Spot Check, Texas RE found that Duke Energy had failed to comply with a Reliability Coordinator (RC) directive. ERCOT, the RC, instructed Duke Energy’s Notrees Wind Farm (NWF) to lower its generation to 0 MW for a post-contingent overload during the period of 19:00 CST to 21:00 CST on June 14, 2009. Duke Energy’s output began to rise above the instructed level from 20:01 CST and 20:28 CST. A Duke Energy operator called ERCOT ISO at 20:36 CST, and after the call, generation was ramped down to zero.
Finding: Texas RE found that the violation posed a minimal risk to BPS reliability, but not a serious or substantial risk. ERCOT was able to drop load from three other Qualified Scheduling Entities. Moreover, ERCOT could only direct NWF to ramp down a maximum of 140 MW, only 0.19% of the 74,000 MW total generating capacity for peak demand in ERCOT. In fact, ERCOT only directed NWF to ramp down 12 MW of generation. 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: January 30, 2013 (no further review)
Electric Reliability Council of Texas, Inc., FERC Docket No. NP11-268-000 (September 30, 2011)
Reliability Standard: IRO-001-1
Requirement: R3
Violation Risk Factor: High
Violation Severity Level: High
Region: Texas RE
Issue: Through an audit, Texas RE determined that the Electric Reliability Council of Texas, Inc. (ERCOT) violated the Standard because the manager of systems operations interfered with the on-duty operating personnel's implementation of procedures for declaring an Emergency Electric Curtailment Plan Step 1 ("EECP Step 1") event, directing the operating personnel to wait before formally declaring the emergency. The manager's direction also directly violated ERCOT's regional rules.
Finding: Texas RE determined that the violation posed a serious and substantial risk to the BPS because emergency conditions existed that required the EECP Step 1 event be declared. Moreover, ERCOT is the only Balancing Authority and Reliability Coordinator that could have declared the EECP Step 1 event in response to the emergency. Duration of violation was November 29, 2007. Texas RE and the NERC BOTCC took into consideration that this was ERCOT's first violation of the Standard in reaching a penalty assessment, and also concluded that the serious and substantial risk to the BPS constituted an aggravating factor.
Penalty: $384,000 (aggregate for 15 violations)
FERC Order: Issued October 28, 2011 (no further review)
Grays Harbor County PUD, FERC Docket No. NP10-2-000 (October 14, 2009)
Reliability Standard: IRO-001-1
Requirement: R8
Violation Risk Factor: High
Violation Severity Level: Not provided
Region: WECC
Issue: In June 2007, Grays Harbor County PUD (Grays Harbor) self-reported that it did not possess a written policy to inform the Reliability Coordinator of times when it would not be able to follow the Reliability Coordinator's directives.
Finding: WECC found that this violation did not pose a serious or substantial risk to the bulk power system due to the nature and location of Grays Harbor's assets. In addition, this was primarily a documentation issue. This violation was self-reported and it was Grays Harbor's first violation of this Reliability Standard. Even though Grays Harbor completed its mitigation plan over 3 1/2 months late, no penalty was imposed.
Penalty: $0
FERC Order: Issued November 13, 2009 (no further review)
NextEra Energy Resources, LLC, FERC Docket No. NP15-1-000 (October 30, 2014)
Reliability Standard: IRO-001-1
Requirement: R8
Violation Risk Factor: High
Violation Severity Level: Moderate
Region: TRE
Issue: On October 12, 2008, ERCOT, as the RC/TOP, issued an “Out of Merit Energy” (OOME) order to NextEra Energy Resources, LLC (NextEra) to reduce the output of the wind-powered facility Capricorn Ridge 4 to zero MW and an OC1, a zonal congestion management tool to redirect generation within certain zones, in order to address overloading on the Menard-San Angelo transmission line. NextEra did not timely respond to the OOME directive, which likely caused ERCOT had to activate the OC1. Thus, NextEra did not properly comply with a RC directive or immediately inform ERCOT of its ability to comply.
Finding: Texas RE determined that the violation constituted a moderate risk to the BPS reliability as the West-North power flow exceeded the stability limits and the BPS was stressed at the time. Furthermore, there was the potential for a negative impact on the BPS if there had not been additional generation available to curtail. Moreover, it was only after several phone calls to NextEra (and after the stability limit issue had been corrected) before NextEra complied with the directive. Ultimately, the risk was mitigated because ERCOT sent regulation signals to other GOPs directing them to curtail generation. The violations are Confirmed Violations. In approving the settlement agreement, the NERC BOTCC viewed NextEra’s prior violations of similar Reliability Standards as aggravating factors. NextEra also had a compliance program in place, which was evaluated as a mitigating factor. In addition, NextEra was cooperative throughout the enforcement process and did not conceal the violations.
Penalty: $52,000 (aggregate for 2 violations)
FERC Order: Pending
Post Oak Wind, LLC, FERC Docket No. NP10-171-000 (September 30, 2010)
Reliability Standard: IRO-001-1
Requirement: R8
Violation Risk Factor: High
Violation Severity Level: Severe
Region: TRE
Issue: In November 2008, TRE discovered, during a spot check, that Post Oak Wind, LLC (Post Oak) did not follow a directive issued by ERCOT on May 22, 2008 (nor did Post Oak provide a valid reason for why it was unable to comply) to increase VAR production in order to help with a low voltage situation on the grid.
Finding: Post Oak agreed to pay a penalty of $198,600 and to undertake other mitigation measures in order to resolve violations of IRO-001-1 and VAR-002-1. TRE found that the violations did not pose a serious or substantial risk to bulk power system reliability since Post Oak, a wind farm, only has a combined capacity of 200 MW. If Post Oak possessed more capacity, TRE determined that the failure to comply with the ERCOT directive could have posed a serious or substantial risk to the bulk power system. Post Oak and its subcontractors were found to be untrained and uncooperative, as well as unable to respond to ERCOT’s requests remotely. The duration of the violation was on May 22, 2008. Furthermore, these were Post Oak’s first violations of the relevant Reliability Standards; Post Oak was cooperative during the enforcement process and did not attempt to conceal the violations; there was a compliance program in place; and there were no additional mitigating or aggravating factors present.
Penalty: $140,000 (with the violation of VAR-002-1, an aggregate penalty of $198,600)
FERC Order: Issued October 29, 2010 (no further review)
Scurry County Wind LP, FERC Docket No. NP11-236-000 (July 28, 2011)
Reliability Standard: IRO-001-1
Requirement: R8
Violation Risk Factor: High
Violation Severity Level: Moderate
Region: TRE
Issue: Scurry County Wind LP (SCW) did not immediately comply with a Reliability Coordinator/Transmission Operator directive on December 14, 2008, in violation of R8. Duration of violation was December 14, 2008 when the violation occurred.
Finding: TRE determined that the violation posed a moderate risk, but not a serious or substantial risk, to the bulk power system because the facility’s total operating capacity is 130 MW and the special protection systems operated as required to prevent a breaker trip. The NERC BOTCC also considered that this was SCW’s first violation of the particular standards at issue, SCW was cooperative, and there was no evidence of an attempt to conceal violations. The NERC BOTCC also found an aggravating factor in that a prior violation of COM-002-2 R1 by SCW’s affiliate, Stanton Wind Energy, LLC, stemmed from similar conduct that also involved real time conditions and failing to immediately follow directives from ERCOT.
Penalty: $45,000 (aggregate for multiple violations)
FERC Order: Issued August 29, 2011 (no further review)
WECC RC [California Mexico Reliability Coordinator OC], Docket No. NP10-160-000 (September 13, 2010)
Reliability Standard: IRO-001-1
Requirement: R4, R5, R7
Violation Risk Factor: Medium for R4; Lower for R5; High for R7
Violation Severity Level: Not provided
Region: NERC as Compliance Enforcement Authority (NCEA)
Issue: The California Mexico Reliability Coordinator self-reported that, during the period from June 18, 2007 through January 1, 2009, it did not have formal operating agreements with each entity to which it delegates tasks as required by IRO-001-1 R4 and had not listed the entities to which it delegated the tasks of providing voice and communication circuits, as well as providing the testing, monitoring, and alarming on those circuits as required by R5 of IRO-001-1. Further, the WECC Operating Agreement with adjacent Reliability Coordinators was not signed until October 2, 2007, as required by IRO-001-1 R7, resulting in a violation for the prior period in which there was no agreement.
Finding: The violations were the first violations of this Reliability Standard and did not constitute a serious or substantial risk to the bulk power system. WECC was certified as the Reliability Coordinator on January 1, 2009 and assumed all further responsibilities. The violation was mitigated through the dissolution of the entity and NERC's certification of WECC as the new Reliability Coordinator for the region.
Penalty: $0
FERC Order: Issued October 13, 2010 (no further review)
Western Electricity Coordinating Council, FERC Docket No. NP11-259-000 (August 11, 2011)
Reliability Standard: IRO-001-1
Requirement: R3
Violation Risk Factor: High
Violation Severity Level: Severe
Region: NERC-Compliance Enforcement (NCEA)
Issue: On November 7, 2008, a fire at a key 500 kV line’s series capacitor bank at a substation caused a 500 KV line to undergo a forced scheduled outage, which caused a Category 2 disturbance. This outage caused excess stability and thermal System Operating Limits on two Western Interconnection transfer paths, which led to load shedding. California-Mexico Reliability Coordinator (CMRC) and Rocky Mountain Desert Southwest Reliability Coordinator (RDRC), two of WECC’s predecessors, did not have the necessary clear decision making authority to direct the actions needed to maintain the reliability of the bulk electric system. In addition, on December 26, 2008, as a result of a battery charger failure, a Transmission Operator possessed inadequate battery voltage supply at one of its substations that was needed to properly operate its protective relays and control circuits of its distribution facilities. Therefore, the Transmission Operator was operating its substation in an unknown operating state for 1.5 hours, which also caused some load shedding to occur. CMRC, as a Reliability Coordinator, did not take the appropriate steps to maintain bulk electric system reliability once it was notified of the loss of adequate voltage supports by the Transmission Operator.
Finding: NCEA and WECC entered into a settlement agreement to resolve multiple violations, whereby WECC agreed to pay a penalty of $100,000 and to undertake other mitigation measures. NCEA found that the IRO-001-1 violation constituted a moderate risk to bulk power system reliability. The events leading to the load shedding were not related to the Reliability Coordinators’ actions and load would still have needed to be shed even if the Reliability Coordinators took the required actions. But, prompt and decisive action by the Reliability Coordinators could have mitigated the results. The duration of the IRO-001-1 violation was from June 18, 2007 through December 31, 2008. In approving the settlement agreement, NERC found that these were WECC’s first violations of the relevant Reliability Standards and WECC was cooperative during the enforcement process and did not conceal the violations. In addition, on February 14, 2008, another predecessor to WECC, Pacific Northwest Security Coordinator (PNSC), was involved in a separate event that led to a settlement for violations of, inter alia, Reliability Standards IRO-001-1 R3, IRO-005-1 R8 and COM-002-2 R2. NCEA evaluated the penalty, mitigation actions and preventative measures imposed in that settlement as part of this proceeding. WECC, which assumed the Reliability Coordinator role effective January 1, 2009, is responsible for the violations of its predecessors.
Penalty: $100,000 (aggregate for 4 violations)
FERC Order: Issued September 9, 2011 (no further review)
Western Electricity Coordinating Council, FERC Docket No. NP14-38 (March 31, 2014)
Reliability Standard: IRO-001-1
Requirement: 2
Violation Risk Factor: High
Violation Severity Level: Moderate
Region: NPCC
Issue: During a compliance audit, NPCC determined that the Western Electricity Coordinating Council (WECC) did not follow its regional reliability plan and approve generation or transmission outages. While WECC would provide a reliability review of the requested outage, the entity submitting the outage request was still responsible for deciding whether to proceed with an outage.
Finding: NPCC found that the IRO-001-1 violation constituted a serious or substantial risk to BPS reliability. By not following its regional reliability plan, WECC was not using clear decision making authority in the Western Interconnection and risked creating system conditions that WECC and other entities not aware of and causing significant adverse impacts on BPS reliability. The duration of the IRO-001-1 violation was from January 1, 2009 through December 11, 2013. WECC neither admitted nor denied the violations. In approving the settlement agreement, NERC BOTCC considered the fact that most of the violations constituted a serious or substantial risk to BPS reliability and NPCC concluded that, left unaddressed, the number and type of reliability violations represented a potential for serious risk to the reliable operation of the Western Interconnection. The violations also represented WECC’s second occurrence of violations for Reliability Standards COM-002, TOP-007 and IRO-005 (although it was not evaluated as an aggravating factor since the prior violations involved legacy procedures used by WECC’s predecessor). Ten of the violations were self-reported, which was viewed as a mitigating factor. WECC was also cooperative throughout the enforcement process and did not conceal the violations.
Total Penalty: $400,000 (aggregate for 19 violations)
FERC Order: Issued August 28, 2014 (no further review)
Western Electricity Coordinating Council, FERC Docket No. NP14-38 (March 31, 2014)
Reliability Standard: IRO-001-1
Requirement: 3
Violation Risk Factor: High
Violation Severity Level: Moderate
Region: NPCC
Issue: During a compliance audit, NPCC determined that, on four occasions, the Western Electricity Coordinating Council (WECC) did not issue sufficiently clear or timely directives in response to system incidents.
Finding: NPCC found that the IRO-001-1 violation constituted a serious or substantial risk to BPS reliability. By not issuing sufficiently clear or timely directives, WECC was not exercising clear decision-making authority and risked the integrity and reliability of the BPS within the Western Interconnection. The duration of the IRO-001-1 violation was from January 1, 2009 through March 28, 2014. WECC neither admitted nor denied the violations. In approving the settlement agreement, NERC BOTCC considered the fact that most of the violations constituted a serious or substantial risk to BPS reliability and NPCC concluded that, left unaddressed, the number and type of reliability violations represented a potential for serious risk to the reliable operation of the Western Interconnection. The violations also represented WECC’s second occurrence of violations for Reliability Standards COM-002, TOP-007 and IRO-005 (although it was not evaluated as an aggravating factor since the prior violations involved legacy procedures used by WECC’s predecessor). Ten of the violations were self-reported, which was viewed as a mitigating factor. WECC was also cooperative throughout the enforcement process and did not conceal the violations.
Total Penalty: $400,000 (aggregate for 19 violations)
FERC Order: Issued August 28, 2014 (no further review)
