FERC last week approved a $700,000 penalty on FirstEnergy Utilities (NYSE:FE) as part of a settlement between the utility and ReliabilityFirst for violations of NERC’s facility ratings standards.
NERC submitted the settlement as a Notice of Penalty in October (NP23-1). FERC said in a statement Wednesday that it would not further review it, leaving the penalties intact.
FirstEnergy’s penalty stems from infringements of FAC-008-3 (Facility ratings) and FAC-009-1 (Establish and communicate facility ratings). Requirement R8 of the FAC-008 specifies the information that transmission owners and some generator owners (GOs) must provide about their facilities to reliability and planning coordinators, and to transmission planners, owners and operators; R1 of the latter standard mandates that TOs and GOs “establish facility ratings for [their] solely and jointly owned facilities that are consistent with the associated facility ratings methodology [FRM].”
On May 9, 2019, FirstEnergy reported to ReliabilityFirst that it was in violation of FAC-009-1. The utility said it had discovered that a facility rating for a 345-kV line was incorrect; after a further extent of condition review on 10 substations, FirstEnergy decided to expand the review to include field walkdowns at all facilities to which the standard applied.
That expanded review “revealed further issues with the accuracy of [FirstEnergy’s] facility ratings across its entire footprint,” according to the settlement. While the full walkdown is expected to be completed by Dec. 31, the utility has already discovered inaccurate ratings at 443 facilities, about 35% of those reviewed by the date of the filing; 301 of those facilities have had their ratings adjusted downward, while the others had to be adjusted upward.
The FAC-008-3 violation arose from self-reports that FirstEnergy submitted in July 2020 and April 2021, stating that it had “failed to provide its TOP [transmission operator], PJM, with the most-limiting facility rating equipment.” The issue began when FirstEnergy realized during a communication with PJM that it had not informed the TOP that a flow circuit breaker was the most-limiting element on a 500-kV transmission line under some circumstances.
An extent-of-condition review found that 50 circuit breakers were similarly incompletely modeled in PJM’s energy management system (EMS). An additional 38 flow circuit breakers were discovered during a later review to either contain ratings discrepancies or to be absent from the EMS altogether.
ReliabilityFirst assessed the FAC-009-1 violations as a “serious and substantial” risk to bulk power system reliability because it could have caused FirstEnergy to operate equipment above its maximum rating, which might have led to equipment degradation and failure, to load shedding in emergencies or to “incorrect post-contingency planning.” The long duration of the violation — the earliest instance began in 2007 when the standard took effect, while the final infringement is expected to end by Dec. 31 — was another factor in assessing the risk.
The FAC-008-3 violations, on the other hand, were assessed as a moderate risk to grid reliability. The factors elevating it from a minimal level were the number of instances, the duration (about four and a half years) and the absence of effective processes to ensure that facility ratings would account for the behavior of circuit breakers in abnormal system conditions.
FirstEnergy’s mitigation actions for the FAC-009-1 violations mainly relate to the ongoing review of facilities, which is expected to lead to corrected ratings for all equipment; the utility has already changed its internal controls to improve the accuracy of its transmission ratings database. For the FAC-008-3 infringements, FirstEnergy’s mitigations include providing PJM with updated EMS model data and ratings, creating internal controls to detect any needed circuit breaker and line rating adjustments, and training personnel to ensure they understand the new processes.
