Entergy will have to pay SERC Reliability $60,000 in penalties for violating NERC’s reliability standards, according to NERC’s Spreadsheet Notice of Penalty for September approved by FERC last week (NP22-32).

NERC submitted the Spreadsheet NOP on Sept. 29; in addition to the sanctions against Entergy, the document also details a settlement between ReliabilityFirst and American Electric Power (AEP) carrying no monetary penalty. The commission said on Friday that it would not further review the settlements, leaving the Entergy penalties intact.

Also approved on Friday was a separate settlement involving violations of NERC’s Critical Infrastructure Protection (CIP) standards (NP22-34) for which details have not been released in accordance with FERC’s policy on critical energy infrastructure information, along with a settlement between National Grid USA and the Northeast Power Coordinating Council (NP22-33). (See National Grid to Pay $512k for Standards Violations.)

Entergy Faulted for Maintenance, Ratings Mishaps

SERC’s settlement with Entergy concerns infringements of PRC-005-6 (Protection system, automatic reclosing, and sudden pressure relaying maintenance) and FAC-008-3 (Facility ratings). The entity self-reported both violations after discovering them in 2019, though they began in 2016 and 2017 respectively.

The relevant portion of PRC-005-6 lays out the schedule by which transmission owners, generator owners and distribution providers must maintain the equipment to which the standard applies. Entergy disclosed to SERC that it had missed the mandatory maintenance times on several components.

Among the facilities affected was the underfrequency panel at Entergy’s Turnerville substation near Plaquemine, La. Installed in 2010, the panel should have undergone maintenance on its protective relay within six years, according to the standard, but Entergy said that during an internal audit staff discovered this had not been done because the flag for the panel in its automated maintenance tracking system had been deactivated by an unidentified person.

Similarly, the utility failed to perform maintenance on batteries at the McAdams and Cleveland substations in Mississippi that was required within 18 months of their activation in June 2016 and June 2017, respectively. Again, in both cases the maintenance was skipped because the flag in Entergy’s automated system was disabled.

SERC attributed all three instances to “ineffective internal controls,” blaming Entergy for failing to “require approval for disabling maintenance tasks” in its substation work management system (SWMS). Following the discovery of the issues, Entergy performed an extent of condition review on the SWMS to find any other disabled maintenance flags that might develop into noncompliance; none were revealed. The regional entity said no harm is known to have occurred as a result of the violation.

Entergy’s FAC-008-3 violations were also discovered in 2019 but were unrelated to the PRC-005-6 violations. They concern requirement R6 of the standard, which requires that each TO and GO have facility ratings for their solely- and jointly-owned facilities that are “consistent with the associated facility ratings methodology.”

In August 2019, Entergy discovered an active alarm at its Hartburg substation in east Texas, caused by a failure of a cooling system. The failure had begun in March of that year, but operational personnel failed to schedule maintenance or to lower the rating of the substation — even though the cooling failure required a 20.5% derate.

Following this discovery, Entergy performed an extent of condition review to find any other conditions on the system requiring a temporary rerating. Five more were found; in each case personnel at the utility received alarms of the problems, but “the alarms were set as a low priority and personnel failed to update the facility ratings.” Entergy admitted it was “unaware as to why the alarms were originally set to low priority.”

According to SERC, the root cause of the issue was “inadequate training,” particularly on the part of the Entergy personnel that set alarm priorities, who had not been trained on the importance of the cooling systems and their role in facility ratings. This led other personnel to dismiss the alarms and focus on other tasks that seemed more important. Entergy responded to the issue by updating all alarms to the correct priority and establishing annual training to ensure staff are aware of the components that affect rating of transformers.

In both the PRC-005-6 and the FAC-008-3 violations SERC noted prior noncompliance history. The RE considered the PRC-005-6 history to be an aggravating factor in the penalty determination because the extent of condition review conducted in that case should have revealed the violations covered in this settlement. SERC said these issues also call into question the effectiveness of the mitigation plan of the previous violation, which focused heavily on the ability to disable maintenance flags in the SWMS.

ReliabilityFirst’s settlement with AEP (acting as an agent for several utilities including Appalachian Power Company, Ohio Power Company, Wheeling Power Company and others) concerns violations of COM-002-4 (Operating personnel communications protocols).

The entity reported to RF in October 2020 that it was in noncompliance with requirement R6 of the standard, which details the appropriate response to an operating instruction during an emergency. Specifically, utilities that receive oral two-party, person-to-person operating instructions during an emergency must either repeat the instruction and receive confirmation from the issuer that they understood it, or request that the issuer repeat the instruction.

According to the Spreadsheet NOP, two of AEP’s internal communications during a system event in 2019 were found to be noncompliant with the requirement because operators had “failed to execute three-part communication,” referring to the prescribed responses. RF identified the root case as “lack of process adherence and discipline,” and described the risk posed as moderate.

While the RE noted that failure to communicate properly increases the risk of failure to understand the instruction, it also acknowledged that these were the only two instances of improper communication out of 25 communications that occurred during the event.

RF said it processed the violation as a Spreadsheet NOP instead of a lower-level infraction in order to highlight the importance of proper communication procedure during an emergency. The RE pointed out that unclear communication “has contributed to significant events … that led to instability and cascading outages, including the 2003 Northeast Blackout and the Florida Blackout of 2008.” However, based on AEP’s self-reporting and cooperation in this incident, RF decided not to levy a monetary penalty for its infraction of the standard.