Pacific Gas and Electric (NYSE:PCG) will have to pay $2.2 million to WECC for violations of NERC reliability standards, along with other mitigating activities, according to a settlement approved by FERC last week (NP21-26).

NERC submitted the settlement to FERC in a Notice of Penalty (NOP) in August, along with a spreadsheet NOP detailing settlements that WECC reached with Farmington Electric Utility System, the U.S. Bureau of Reclamation and Southern California Edison (SCE) (NYSE:EIX) (NP21-28).

The settlement with Farmington carries a $49,000 penalty, while SCE settled for an $85,000 penalty. WECC did not assess a monetary penalty for the violation by the Bureau of Reclamation, citing a D.C. Circuit Court of Appeals ruling that FERC and NERC cannot impose such penalties against federal governmental entities.

In addition, NERC disclosed that it had also submitted a settlement to FERC involving one or more violations of the Critical Infrastructure Protection (CIP) standards (NP21-27), though it did not publicly reveal details of the violations in accordance with an agreement with the commission last year. (See FERC, NERC to End CIP Violation Disclosures.) FERC on Thursday indicated that it would not review the settlements, including the CIP violations, letting the penalties stand.

More than a Decade of Facility Misratings

PG&E’s penalty stems from violations of five standards:

• • • FAC-009-1 — Establish and communicate facility ratings (This standard was in effect when the violations began; the effective standard now is FAC-008-5 — Facility ratings.)
    • FAC-501-WECC-1 — Transmission maintenance (since replaced by FAC-501-WECC-2)
    • PRC-005-6 — Protection system, automatic reclosing, and sudden pressure relaying maintenance
    • PRC-005-1a — Transmission and generation protection system maintenance and testing (replaced by PRC-005-1.1b)
    • PRC-004-5(i) — Protection system misoperation identification and concern (now PRC-004-6)

WECC discovered the FAC-009-1 violations during a compliance audit in 2018, but the issues were determined to have begun at least 11 years earlier. The regional entity found that the utility’s facility ratings for more than 1,000 generation and transmission facilities across its entire footprint were missing the current carrying series elements, making it impossible for PG&E to determine the most limiting element for each facility. As a result, the calculation of system operating limits for each facility were inaccurate.

The shortcomings already existed in 2007 when the standard took effect and were never corrected in the years before WECC’s compliance audit. The RE identified the root cause of the violation as “poorly defined management and guidance regarding how to maintain a comprehensive facility ratings program,” with a contributing cause being the lack of a process for maintaining the facility ratings database.

WECC determined that the risk posed by PG&E’s violation was “serious and substantial,” with the potential for equipment damage or failure, unplanned or cascading outages, and other serious issues across the utility’s 18,000 miles of transmission lines and 8,000 MW of generation facilities. Mitigation was ongoing at the time of WECC’s filing; steps to be completed by March 2022 include:

• • • updating WECC on a quarterly basis regarding facilities status;
    • performing a document review, identifying gaps and generating a report for all facilities;
    • updating facility ratings guidance documents; and
    • developing and implementing an asset register for electric transmission.

Inspections Skipped for Years

The violation of FAC-501-WECC-1 concerns requirement R3, which requires transmission owners to “implement and follow their” transmission maintenance and inspection plan (TMIP). PG&E reported to WECC on Dec. 5, 2018, that it was in potential noncompliance with the requirement after discovering that 10 towers on two parallel 500-kV transmission lines had not been visually inspected as the TMIP required in 2014, 2017 and 2018.

WECC found that the utility had exhibited “less than adequate process design” for carrying out the TMIP, noting that while a supervisor had noted that the towers were not inspected in 2014 or 2017 because of various factors such as agriculture work in the vicinity, the same person had failed to ensure that the inspections were carried out later when these were no longer an issue.

According to PG&E, all 10 affected towers had been inspected by the time of its report, which WECC later verified. The RE determined that the violation posed a “serious and substantial risk” to the bulk power system, though acknowledged that the towers “showed no signs of degradation” and did not contribute to any incidents or fires while the violation was occurring.

PG&E’s mitigation measures were completed by March 3, 2020. Actions taken by the utility include rearranging its inspection schedule to account for the issues that previously interfered with the inspections and modifying its processes to better account for situations where inspections cannot be performed as scheduled.

Wrong Battery Baseline Used

The PRC-005-6 violations were also self-reported: PG&E notified WECC in January 2018 and April 2019 that it was potentially in noncompliance with requirement R3 of the standard, which mandates that utilities “that [utilize] time-based maintenance program(s) shall maintain [their] protection system, automatic reclosing and sudden pressure relaying components … in accordance with the minimum maintenance activities and maximum maintenance intervals” prescribed in the standard. WECC determined that the self-reports stemmed from the same issue and consolidated them in the settlement.

The first report originated during an internal compliance review on Oct. 20, 2017, when PG&E determined that it did not use the correct values in a battery resistance test conducted the previous year. If it had used the correct values, the battery bank would have failed the test. When it discovered the mistake, the utility reviewed its testing for the previous year and found that it had used the wrong baseline to verify 58 battery banks across its footprint.

In the second case, PG&E found that it had not completed maintenance and testing activities for four electromechanical relays at one substation since December 2012. The tests were required every six years, and while a test had been scheduled for January 2018, it was not completed because of “storms and operational concerns.” As a result, the utility had been in violation of the standard since December 2018.

The violation began on Jan. 15, 2016, when PG&E failed to verify the battery banks using the correct baseline, and ended on Jan. 24, 2019, when the utility completed the corrected tests on all affected batteries. PG&E completed testing the substation relays in the intervening time as well.

Additional mitigation activities by the utility included conducting spot checks of battery records across its footprint and revising the battery maintenance program “to clarify roles and responsibilities for all battery testing and review activities.” It also “added system protection and testing personnel to the quarterly transmission outage planning meetings” in order to prevent future mix-ups with maintenance and testing activities.

Software Migration Delays Relay Testing

PG&E’s violation of PRC-005-1a relates to requirement R2, which states that utilities must “provide documentation of [their] protection system maintenance and testing program and the implementation of that program to its regional reliability program on request (within 30 calendar days).”

PG&E reported on May 6, 2020, that it had not maintained and tested five protection system relays at two substations within defined intervals. The issue arose from an error when the utility was transferring its relay settings to a new database in 2017; PG&E discovered in 2019 that the settings for the five relays were never entered into the new database. As a result, testing on these relays had been overlooked since 2012.

At the time of WECC’s filing, the violation was still ongoing because PG&E was performing an extent-of-condition evaluation to determine if any other relays had not been migrated appropriately. Remediation activities completed at the time included performing additional field validations of physical assets and generating a job aid “outlining the requirements for reviewing and approving test reports”; additional work to be completed included maintaining and testing the affected relays and continuing to “provide period progress [updates] on extent of condition evaluation.”

Oversight in Misoperation Process

Finally, the infringement of PRC-004-5(i) — specifically requirement R5, mandating development of corrective action plans (CAPs) for misoperations of protection system components — was reported by PG&E on May 22, 2020.

The utility notified WECC that on April 12, 2019, a transformer bank at a substation tripped out-of-section because a protection system misoperation, resulting in an interruption to another transformer in the same substation. PG&E submitted a report to its CAP program documenting corrective actions and developed a CAP for the misoperation within 120 calendar days, as required by the standard.

In addition, the utility determined that the CAP “was not applicable to its other protection systems” after reviewing all of its misoperations since 1999. However, this determination was not done until April 16, 2020, more than a year after the misoperation; the standard requires that such a conclusion be reached no more than 60 days after the event, putting PG&E in violation for the intervening time.

WECC determined that the violation posed a moderate risk, but it noted that the utility had committed similar infringements on six other occasions by failing to evaluate a CAP’s applicability to other protection systems than those involved in the initial misoperations. The RE observed that “such failure could have resulted in additional misoperations” leading to more serious issues like the loss of a transformer.

PG&E’s mitigation plan included providing refresher training to protection system personnel regarding PRC-004 requirements and performing an extent of condition review to find any other potential issues. The utility reported on March 4 that it had completed its mitigation plan; at the time of filing WECC was reviewing PG&E’s certification.