FERC has approved a $380,000 penalty leveled against American Electric Power (AEP) by ReliabilityFirst for violating NERC’s reliability standards for relay trip limits, along with a separate $40,000 penalty against the Lansing Board of Water and Light (BWL) for infringing on NERC’s facility rating standard. 

The commission announced in a Feb. 28 filing that it would not further review the settlements between RF and the two utilities, filed by NERC on Jan. 30. FERC also indicated it would approve two other settlements involving violations of NERC’s Critical Infrastructure Protection standards. Details of these infractions, including the utilities and regional entities involved, were not made public in keeping with commission policy on CIP violations. 

According to the AEP settlement, the utility notified RF of its violation in June 2021 via a self-report (NP25-7). AEP told the RE that it had identified a potential noncompliance with PRC-023-4 (Transmission relay loadability) involving a relay on the Nagel-Phipps Bend 500-kV circuit. 

Requirement R1 of the standard lays out the criteria that utilities must use to ensure its circuit terminals do not “prevent [their] phase protective relay settings from limiting transmission system loadability while maintaining reliable protection of the” grid.  

Entities may choose one of 13 criteria to implement. Criterion 1 requires entities to “set transmission line relays so that they do not operate at or below 150% of the circuit’s highest seasonal facility rating” for a defined loading duration as close as possible to four hours.  

The relay in question went into service Dec. 27, 2019. RF said AEP didn’t know at the time that an engineer had listed the phase time overcurrent (TOC) setting for the relay in AEP’s settings workbook incorrectly, the result of the worker misreading an “engineering template default setting [that] limited the loadability of the line.” During a “storm and period of high load” on Feb. 16, 2021, the relay tripped and caused a misoperation on the Nagel-Phipps Bend circuit. 

RF said the values communicated to AEP’s transmission planning personnel for the relay’s summer normal and emergency ratings were 3,609 MVA, while the communicated winter normal and emergency ratings were 4,473 MVA. However, the actual ratings in all cases were 396 MVA. AEP performed an extent of condition review and did not discover any further PRC-023-4 noncompliance. 

The RE said the root cause of the noncompliance was the engineer placing the wrong settings into service. This error itself was due to confusion created by the relay-setting software. The software created a new folder every time a setting was changed, while keeping the original, unaltered settings in a separate folder called the working folder. The engineer used the settings from the working folder instead of the new folder. 

RF noted that AEP also lacked sufficient internal controls for validating relay settings. While the utility performs a peer review before settings are placed in service, and the correct settings were reviewed in this case, the problem arose after the review when the engineer mistakenly input the settings from the wrong folder. 

The RE assessed the risk posed by the violation as “serious and substantial,” observing that “improperly setting relays for transmission system components can prematurely trip these components out of service, limiting system operator flexibility and their ability to take controlled actions,” and “the worst-case scenario (a tripped relay that caused a misoperation) actually occurred during a storm and period of high load.” 

AEP’s mitigating actions — which the utility completed on Sept. 23, 2021 — include: 

• • Correcting the relay settings the day of the misoperation. 

• • Working with the settings software vendor to improve the confusing folder setup. 

• • Reviewing all relays with default settings enabled for the relevant areas. 

• • Introducing an automated relay settings tool to minimize human error when calculating settings. 

• • Checking similar protective relay settings for other instances in which the phase TOC was enabled incorrectly. 

Lansing BWL Settles for Ratings Errors

BWL’s settlement with RF stemmed from violations of FAC-008-3 (Facility ratings). It was the only settlement submitted in NERC’s monthly spreadsheet notice of penalty (NP25-8). Unlike AEP’s infringement, this violation was discovered by the RE during a compliance audit Dec. 11, 2020. 

RF determined that BWL had failed to “establish facility ratings consistent with its facility ratings methodology (FRM),” as required by requirement R6 of the standard — and requirement R1 of FAC-009-1 (Establish and communicate facility ratings), the standard in effect when the violation began.  

Under BWL’s FRM, all transmission lines and their vertical clearance should be capable of operating safely at 160 degrees Celsius. However, BWL only could demonstrate a safe operating temperature of 100 degrees C. RF attributed this discrepancy to a software issue. 

BWL updated its FRM to reflect the lower safe operating temperature and to “more clearly account for sag limited ratings.” After these changes, the utility still had to remediate thermal rating inconsistencies at two transmission lines, which it did by assigning both lines a higher sag limited rating. 

RF said the root cause of the issues was “multifaceted”; the incorrect software setting was due to inadequate verification controls, while the derates related to the thermal violations occurred because BWL’s procedures did not account for the “particular attributes” of field conditions around the two lines. Violations dated back to 2011, when the utility registered as a transmission owner and was required to comply with FAC-009-1, and ended on March 8, 2024, when BWL updated its FRM and completed remediation on the last line. 

The RE said the violation posed a moderate risk to grid reliability, due in part to the duration of the violation and the size of the derates on the two lines (39% and 83%). But RF also called the risk not serious because the company never operated the affected lines within 10% of the corrected facility ratings and no harm is known to have occurred.