A new report released Wednesday by SERC aims to help “registered entities … reduce the risk of facility ratings challenges, resulting in a more reliable and secure” bulk power system.

The report, “Facility Ratings Themes and Lessons Learned,” was inspired by the “hundreds of individual instances” of violations of NERC reliability standard FAC-008-5 (Facility ratings) and its predecessors that SERC has logged since 2017. SERC based its analysis on data from those violations, as well as information “gathered through [its] various voluntary outreach and training activities.”

Improper facility ratings are a frequent source of compliance issues in SERC and other regions: FERC last year approved a $570,000 penalty leveled by ReliabilityFirst against American Electric Power over misratings at nearly 600 facilities. (See AEP to Pay $570K in NERC Penalties.) WECC also lodged a $265,000 settlement with Public Service Company of New Mexico over facility ratings issues last year, and SERC settled with the Tennessee Valley Authority for the same reason in March. (See FERC OKs $265,000 PNM Penalty.)

At SERC’s Board of Directors and Members meeting last month in Savannah, Ga., the regional entity’s vice president of operations, Tim Ponseti, said the frequency of facility ratings violations was becoming a source of concern for the ERO Enterprise and prompted the report. (See SERC Board of Directors/Members Briefs: March 30, 2022.) With the growing risk of extreme weather from climate change, as well as the ongoing adoption of new generation resources, the RE felt it was necessary to address the reasons behind the issues.

“Facility ratings have a far- and wide-reaching impact [on] daily operations: real-time analysis, next-day planning, long-term planning, modeling … and the list goes on,” Ponseti said. “All these areas are making critically important decisions, and at their fundamental basis is a reliance on an assumption of accurate facility ratings.”

Utilities Lack Awareness of Own Systems

The report identified three major themes associated with the majority of the FAC-008 violations encountered by SERC in the last five years. Each theme was considered the primary cause of about a third of the infringements studied. While the document identified “potential mitigation strategies” for each issue, SERC emphasized that these should not be considered binding requirements or directives for industry.

The first theme, accounting for 28% of violations, was lack of awareness, which SERC defined as the absence of “an accurate physical accounting or understanding of the current-carrying equipment” within a utility’s system. Failure to develop and implement a facility ratings program also falls under this category.

When this occurs, entities tend to rely on rating information provided by equipment manufacturers, nameplate ratings or outdated field inspection reports. Without frequent inspections, inaccurate ratings may “go undetected for a long duration.”

SERC suggested addressing this issue by enhancing the engagement and oversight of senior management, urging leaders to “set a positive ‘tone at the top’ by creating a culture … that treats facility ratings as a program — like safety — and not like a one-time project with a finite start and end date.” This approach includes establishing a level of engagement with the entity’s RE and with NERC; the report noted that the ERO Enterprise has performed “a significant amount of outreach” to industry regarding facility ratings and that keeping up with these efforts could help utilities build awareness of potential deficiencies in their programs.

Periodic field validations are an essential component of a facility ratings program that is too often neglected, SERC said. As equipment is replaced in the field during restoration from extreme weather events, entities must ensure that they are not simply reusing the same ratings, which may not apply to the new items. Physical walk-downs can also help to spot equipment that an entity may have lost track of after a merger or acquisition.

Asset, Data and Change-management Challenges

Another theme identified in the report, and comprising 34% of violations, is inadequate asset and data management. Asset management is defined as the identification, management and tracking of physical facility ratings assets, while data management is the collection, validating and storage of ratings-connected data.

Managing assets and data can be challenging, because physical assets can range in size from very large to extremely small and may also be located in places that are physically difficult to inspect; data are often stored by the same departments that use them, for which storage is not necessarily a priority. This means that when data are needed during an audit or review, a utility may face delays tracking them down.

Mitigation strategies for asset and data management include periodic field verification programs, as well as effective data capture and verification strategies and spreadsheets or databases to store information properly. Entities must also include contractors in their strategies and make sure they are also trained in the proper data management schemes.

The third theme is inadequate change management, which SERC said enables “facility and equipment rating changes to be captured, coordinated and implemented throughout the entity in a timely manner.” Failure to properly track changes to an entity’s equipment can create an inaccurate assessment of its system, leading to breakdowns at critical moments.

SERC described a case when a generator owner and transmission owner installed a new transformer at a facility, replacing a transformer that had been the most limiting element there. The new component had a higher rating and was therefore no longer a limiting element; however, the utility failed to account for this by updating its facility rating. In another case, a transformer was shared between two units. The utility retired one of the units and reconfigured the high-voltage bus, but nobody thought to adjust the facility ratings.

The report’s authors recommended implementing a strong change-management process that provides “clear roles and responsibilities,” as well as a quality assurance review process for each change. The process should be communicated to personnel through regular training and verified through field inspections, they said.