Reliability Standard: IRO-001-1.1
Requirement: 8
Violation Risk Factor: High
Violation Severity Level: Severe
Region: RFC
Issue: On the evening of June 23, 2010, PJM, American Electric Power Service Corporation's (AEP) Reliability Coordinator, experienced multiple outages on the AEP 138 kV system in the Benton Harbor area of southwest Michigan (the Kenzie Creek Event). During RFC's compliance investigation of the Kenzie Creek Event, RFC determined that AEP did not comply with the Reliability Coordinator's directives to open the 34 kV "B" and "D" breakers at the Valley Substation (and did not inform the Reliability Coordinator of its inability to perform the directives). AEP stated that it did not perceive clear directives. In response to three instructions from PJM, AEP's System Control Center (SCC) operator communicated to PJM its reluctance to shed load and its difficulty with opening the breakers (as more issues may have been encountered).
Finding: RFC found that this violation constituted a moderate risk to BPS reliability since disregarding the directives of the Reliability Coordinator is detrimental to reliable operation of the BPS. But, the conditions were subject to real-time monitoring and PJM and AEP were engaged in communications to resolve the issue. The duration of the IRO-001-1.1 R8 violation was from June 23, 2010 through October 24, 2012. AEP admitted to the facts of the violations. In approving the settlement agreement, NERC BOTCC considered the fact that one of the violations was self-reported and that AEP had a compliance program in place (which was viewed as a partial mitigating factor). AEP also had two previous violations of FAC-009-1 R1. AEP was cooperative during the enforcement process and did not conceal the violations. Furthermore, AEP conducted an apparent cause analysis after the Kenzie Creek Event. In regards to the Kenzie Creek incident, one violation (FAC-009-1 R1) constituted a minimal risk to BPS reliability; five violations (COM-002-2 R2, EOP-003-1 R8, IRO-001-1.1 R8, PER-002-0 R1 and TOP-001-1 R5) constituted a moderate risk to BPS reliability; and four violations (EOP-001-0 R3, EOP-003-1 R1 and TOP-001-1 R1 and R2) constituted a serious and substantial risk to BPS reliability.
Total Penalty: $225,000 (aggregate for 10 violations)
FERC Order: Issued June 28, 2013 (no further review)
Brazos Electric Power CoOp. Inc., FERC Docket No. NP12-10 (December 30, 2011)
Reliability Standard: IRO-001-1.1
Requirement: R8
Violation Risk Factor: High
Violation Severity Level: High
Region: TRE
Issue: Brazos, a GO, self-reported a violation of IRO-001-1.1 due to its failure to comply with a directive of its RC, the Electric Reliability Council of Texas (ERCOT). On February 2, 2011, ERCOT had a system emergency and issued a directive that no units should be taken offline during the emergency except for forced outages. During that emergency and in violation of the directive, Brazos removed a 15 MW hydroelectric resource from service for the purpose of conserving water. Brazos did recognize its mistake and ordered the unit back in service, but the unit was unable to restart immediately due to an operational limitation delay of 30 minutes.
Finding: TRE found the violation constituted a minimal risk to BPS reliability. The unit was only 15 MW and Brazos had additional generation from other resources to cover the loss of power generated by the one unit. TRE considered Brazos’ compliance program as a mitigating factor in determining the penalty amount.
Penalty: $8,500 (aggregate for two violations)
FERC Order: Issued January 27, 2012 (no further review)
EnerNOC, Inc. (EnerNOC), Docket No. NP13-25-000 (February 28, 2013)
Reliability Standard: IRO-001-1.1
Requirement: 8
Violation Risk Factor: High
Violation Severity Level: Severe
Region: TRE
Issue: During a spot check in March 2012, TRE found that EnerNOC, at a time when the ERCOT system was stressed due to a cold weather even on February 2, 2011, did not comply with an ERCOT RC/TOP directive issued at 5:49 am to shed Emergency Interruptible Load Service load within 10 minutes of the request. Responding to the load shed request would not have violated safety, equipment, regulatory or statutory requirements. ERCOT issued a verbal dispatch instruction to EnerNOC to interrupt the non-business hour load they had contracted with ERCOT to shed, but the EnerNOC network operations center operator, as a result of human error, did not initiate any dispatch actions in response. EnerNOC was required to comply with the directive and institute the load shed by 5:59 am, but did not shed its load until the 15-minute interval ending at 9:15am.
Finding: TRE found that the IRO-001-1.1 violation constituted a moderate risk to BPS reliability as ERCOT had declared an Energy Emergency Alert-3 (i.e., ERCOT had difficulty maintaining a system frequency of 59.8 Hz and firm load was required to be shed). All resources, including demand response providers such as EnerNOC, were required to participate in order to minimize the amount of firm load shedding. But, EnerNOC was only required to shed 80 MW of non-business hour load and provided its curtailment service three hours and fifteen minutes late. The duration of the IRO-001-1.1 violation was approximately three hours on February 2, 2011. EnerNOC acknowledged the violation. In approving the settlement agreement, the NERC BOTCC considered the fact that these were the EnerNOC’s first violations of the relevant Reliability Standards. EnerNOC was also cooperative during the enforcement process and did not conceal the violations. While EnerNOC did not have a compliance program in place when the violations occurred, EnerNOC has undertaken measures to improve its centralized compliance program after an audit of its market activity in ISO NE and NYISO (including budgeting $500,000-$700,000 for compliance activities in 2013). Prior to this centralized compliance program, EnerNOC followed a decentralized approach that relied on numerous different policies but that did foster a compliance ethic among its employees. In addition, EnerNOC paid $45,000 to the Public Utility Commission of Texas to address this same incident, which is also the same as EnerNOC’s estimated costs to undertake additional agreed-upon compliance measures.
Total Penalty: $25,000 (aggregate for 2 violations)
FERC Order: Issued March 29, 2013 (no further review)
Enerwise Global Technologies (Comverge, Inc.), FERC Docket No. NP14-2 (October 30, 2013)
Reliability Standard: IRO-001-1.1
Requirement: 8
Violation Risk Factor: High
Violation Severity Level: Lower
Region: TRE
Issue: As a result of a spot check, TRE determined that Enerwise Global Technologies (Enerwise) did not inform the RC/TOP, as required, of its inability to comply with a February 2, 2011 directive. In response to the 5:49 am directive, issued in response to cold weather-related generating unit forced outages and de-ratings, to deploy Emergency Interruptible Load Service (EILS), Enerwise was supposed to interrupt 32.5 MW of load during non-business hours within ten minutes. But, Enerwise failed to inform the RC/TOP that it could not comply with the directive (and Enerwise did not shed the load until 8:53 am after the issuance of the second EILS directive).
Finding: TRE found that the IRO-001-1.1 violation constituted a moderate risk to BPS reliability as the violation occurred during an Energy Emergency Alert 3 event on ERCOT’s system and all resources were necessary in order to minimize firm load curtailment. But, Enerwise’s EILS load shed obligation was only 32.5 MW, as compared to the total 4000 MW of firm load that ERCOT directed to be shed. The IRO-001-1.1 violation lasted for approximately 3 hours on February 2, 2011. Enerwise neither admitted nor denied the violations. In approving the settlement agreement, NERC BOTCC considered the fact that the violations were Enerwise’s first violations of the relevant Reliability Standards. The violations were not intentional and Enerwise was cooperative during the enforcement process and did not conceal the violations. The violations did not constitute a serious or substantial risk to BPS reliability.
Total Penalty: $19,000 (aggregate for 2 violations)
FERC Order: Issued November 29, 2013 (no further review)
Florida Reliability Coordinating Council, FERC Docket No. NP15-2-000 (October 30, 2014)
Reliability Standard: IRO-001-1.1
Requirement: R3
Violation Risk Factor: High
Violation Severity Level: Severe
Region: SERC
Issue: On July 29, 2012, a tree fell on the 230 kV Hopkins-Crawfordville line, which caused the line to relay and lock out. The line was not restored until approximately four hours later. In connection with this incident, the Florida Reliability Coordinating Council (FRCC), as the RC, self-reported that although its Real-Time Contingency Analysis (RTCA) evaluated expected system conditions and predicted that an Interconnection Reliability Operating Limit (IROL) would be exceeded in a specific contingency, it did not timely take action to ensure the integrity of the BES as it did not implement its reliability process or System Operating Limit (SOL) methodology for approximately an hour and a half in response to the incident.
Finding: SERC determined that the violation constituted a serious or substantial risk to BPS reliability as failing to implement the SOL methodology or reliability process could have resulted in an SOL exceedance and the islanding and loss of up to 274 MW of load. However, no actual harm to BPS reliability resulted as there was no IROL exceedance and any loss of load that would have occurred would have been confined to the local load-serving area. The violation occurred on July 29, 2012. FRCC neither admitted nor denied the violations. In approving the settlement agreement, the NERC BOTCC found that two of the violations posed a serious or substantial risk to BPS reliability. However, these were FRCC’s first violations of the Reliability Standards at issue and the violations were self-reported. FRCC took additional actions to mitigate the risk and it had an internal compliance program in place, which SERC considered as mitigating factors. FRCC also cooperated throughout the enforcement process and did not conceal the violations.
Penalty: $100,000 (aggregate for 6 violations)
FERC Order: Issued November 28, 2014 (no further review)
Iberdrola Renewables, FERC Docket No. NP11-258-000 (August 11, 2011)
Reliability Standard: IRO-001-1.1
Requirement: R8
Violation Risk Factor: High
Violation Severity Level: Moderate
Region: TRE
Issue: During an audit in 2010, TRE found that on December 21, 2008, Iberdrola Renewables (Iberdrola) did not properly follow a directive (or Verbal Dispatch Instruction) from ERCOT that it disconnect its Penascal wind farm from the grid.
Finding: TRE and Iberdrola entered into a settlement agreement to resolve multiple violations, whereby Iberdrola agreed to pay a penalty of $7,000 and to undertake other mitigation measures. TRE found that the IRO-001-1.1 violation did not constitute a serious or substantial risk to bulk power system reliability since the Penascal wind farm was in testing mode and only exporting approximately 26 MW of power to the ERCOT grid when the directive was issued. In addition, there was confusion over the exact real power output from the Penascal wind farm (as a result of telemetry issues), which is what caused ERCOT to issue the directive. The IRO-001-1.1 violation occurred on December 21, 2008. In approving the settlement agreement, NERC found that these were Iberdrola’s first violations of the relevant Reliability Standards; Iberdrola was cooperative during the enforcement process and did not conceal the violations; Iberdrola had a compliance program in place (which was evaluated as a mitigating factor); and there were no additional aggravating or mitigating factors.
Penalty: $7,000 (aggregate for multiple violations)
FERC Order: Issued September 9, 2011 (no further review)
Loraine Windpark Project LLC, Docket No. NP12-18 (February 29, 2012)
Reliability Standard: IRO-001-1.1
Requirement: R8
Violation Risk Factor: High
Violation Severity Level: Severe
Region: Texas RE
Issue: After receiving an incident report from ERCOT, Texas RE conducted a spot check of Loraine Windpark’s compliance of IRO-001-1.1 R8 and TOP-001-1 R3. Loraine Windpark, a GO, did not follow a directive issued by ERCOT for the time period 13:47 (CPT) until 16:30 on November 11, 2010, as required by IRO-001-1.1 R8. During a nodal market readiness test (Nodal LFC Test) being conducted by ERCOT, a directive related to the generation output levels for facilities within its control (Lone Wolf I and Lone Wolf II) was not followed; however, ERCOT was not notified that the reason was because complying with the directive would violate safety, equipment, or regulatory or statutory requirements, according to Loraine Windpark.
Tenaska Power Services (TPS) uses Morgan Stanley SQ3 for Qualified Scheduling Entity (QSE) services for Loraine Windpark. Also, Morgan Stanley is the scheduling representative for Lone Wolf Wind Generator Resource (Lone Wolf). While conducting the Nodal LFC Test, TPS was told to follow the nodal base points for Lone Wolf, which was over-generating by 37 MW, and Lone Wolf Unit 2, which was over-generating by 38 MW. The ERCOT System Operator did not reference the West-North stability limit during his call to the QSE scheduling representative for Lone Wolf. At 14:27:20, TPS called the ERCOT Operator to report that Lone Wolf was unable to follow its base points, as instructed by ERCOT, due to SCADA system control issues which ultimately led to the finding that a hardware failure was preventing the SCADA system from properly curtailing Lone Wolf Units 1 and 2. The SCADA system had been installed and successfully tested by Lone Wolf in advance of the Nodal LFC Test.
When Loraine Windpark’s owners were alerted to the directive from ERCOT, they instructed the plant operators at the Lone Wolf facility to manually follow all requests to curtail while work to correct the SCADA system technical issues was being done. The ERCOT Operator clarified that the instruction was considered to be a directive by ERCOT at 14:27:20, when Morgan Stanley SQ3 called the ERCOT Operator to explain the problems Lone Wolf was having with the SCADA system. At approximately 16:30, Loraine Windpark began to manually follow its nodal base points as directed by ERCOT.
Finding: The violation constituted a moderate risk to BPS reliability because ERCOT ISO used other generation reductions in order to reduce flow on the West-North stability limit. However, power flow on the West-North stability limit (consisting of six 345 kV lines) was exceeded by about 137 MW due to Loraine Windpark failing to follow the directive. Loraine Windpark’s compliance program was neither a mitigating nor aggravating factor in determining the appropriate penalty; however, Loraine Windpark was given credit for mitigating actions “above and beyond” the norm.
Penalty: $32,500 (aggregate for 2 violations)
FERC Order: Issued March 30, 2012 (no further review)
Luminant Energy Company, LLC, FERC Docket No. NP11-222-000 (June 29, 2011)
Reliability Standard: IRO-001-1.1
Requirement: R8
Violation Risk Factor: High
Violation Severity Level: Severe
Region: TRE
Issue: As a result of a self report, TRE determined Luminant Energy Company, LLC (LEC) was in violation of IRO-001-1.1 R8 as a Generator Operator because it did not follow directives from its Reliability Coordinator (ERCOT ISO) on various occasions. Specifically, on four separate days, ERCOT ISO issued a series of electronic “Out-of-Merit Energy” directives to an LEC operator, who failed to notify the relevant facility or provided the relevant facility incorrect instructions, and subsequently the generating units at issue did not comply with ERCOT ISO’s directives.
Finding: TRE assessed a $107,000 penalty for this and other violations. The violation posed a minimal risk, but did not pose a serious or substantial risk to the reliability of the Bulk Power System because although LEC did not dispatch resources as directed, the redispatch errors were not so serious that ERCOT ISO ever took action to correct the errors. Moreover, the maximum discrepancy between the directives and the actual output from the facilities was relatively modest, at 45 MW. The NERC BOTCC determined this was LEC’s first occurrence of this type of violation; LEC self-reported one of the violations, LEC was cooperative; LEC had a compliance program, which RFC considered a mitigating factor; there was no evidence of any attempt or intent to conceal a violation; and there were no other mitigating or aggravating factors.
Penalty: $107,000 (aggregate for 4 violations)
FERC Order: Issued July 29, 2011 (no further review)
MP2 Energy, LLC, FERC Docket No. NP13-50 (August 30, 2013)
Reliability Standard: IRO-001-1.1
Requirement: 8
Violation Risk Factor: High
Violation Severity Level: Severe
Region: TRE
Issue: During a spot check, TRE found that, during a cold weather incident on February 2, 2011, MP2 Energy, LLC (MP2), a LSE, did not immediately inform its RC, as mandated, of its inability to carry out a directive to deploy Emergency Interruptible Load Service (EILS). While MP2 failed to meet its total EILS obligation early in the EILS deployment (as one of its resources was unable to deploy), MP2 satisfied its total EILS obligation in all of the 15 minute intervals starting after 8am (as other resources shed more than their obligations). The resource at issue was unable to deploy during the entire EILS deployment, and the RC/TOP was not informed of the resource-specific problem.
Finding: TRE found that the IRO-001-1.1 violation constituted only a minimal risk to BPS reliability since MP2 only missed supplying its total contractual obligation of 30 MW by 0.54 MW for a duration of 45 minutes (out of the 28 hour EILS deployment). In addition, ERCOT was able to obtain alternative sources of load shedding. The IRO-001-1.1 violation occurred on February 2, 2011. MP2 neither admitted nor denied the violations. In approving the settlement agreement, NERC BOTCC considered the fact that the violations were MP2’s first violations of the relevant Reliability Standard and MP2 had a compliance program in place when the violations occurred (which was evaluated as a mitigating factor). MP2 was also cooperative during the enforcement process and did not conceal the violations. TRE found that the violations did not present a serious or substantial risk to the BPS.
Total Penalty: $12,000 (aggregate for two violations)
FERC Order: Issued September 27, 2013 (no further review)
