A $150,000 penalty leveled by SERC Reliability and multiple other regional entities for violations of NERC’s reliability standards at several wind and solar power facilities operated by Duke Energy will stand, after FERC confirmed in a Jan. 29 filing that it would not further review a settlement between the REs and Duke (NP25-4).
NERC filed the settlement with the commission Dec. 30, 2024, in a spreadsheet notice of penalty. The ERO also filed a separate spreadsheet NOP for violations of the Critical Infrastructure Protection standards, but information on these infringements was not disclosed for security reasons. The commission also approved the CIP violation settlements.
Commissioner Judy Chang did not participate in FERC’s decision, according to the commission’s filing.
The spreadsheet NOP did not identify the other REs involved in the settlement besides SERC. However, it did list the facilities where violations were found. These facilities were located in Texas, Oklahoma, North Carolina, Wyoming, California, Iowa and Kansas, suggesting that the Texas Reliability Entity, Midwest Reliability Organization and WECC could be parties to the settlement as well. SERC said in the filing that the facilities were part of an existing coordinated oversight agreement.
All of the facilities involved were built by Duke Energy Renewables and operated by the utility until 2023, when DER was acquired by Brookfield Asset Management and rebranded Deriva Energy. Duke Energy Renewables Services continued to operate the facilities.
According to the spreadsheet NOP, Duke informed SERC in 2023 that the solar and wind facilities were not compliant with FAC-008-5 (Facility ratings). Requirement R6 of the standard mandates that transmission owners and GOs must “have evidence to show that [their] facility ratings are consistent with the documentation for determining” those ratings.
A total of 12 of the documented facilities had lacked accurate facility ratings since their registrations first became effective, SERC said, ranging from July 2009 to April 2023. In eight cases, the documented rating was higher than the rating of the facility’s most limiting element; the magnitude of the difference ranged from 1.23 MVA to 17.35 MVA. The other four had ratings lower than the most limiting element.
Three more facilities had accurate ratings at the time their registrations became effective, but the facilities were rerated in February 2023 after a vendor miscalculated the capacity of the wind turbines at each site. As a consequence, the utility established new ratings that were lower than the previous ratings. These errors were corrected by June 2023.
In addition, DERS had all of its entities perform an extent of condition review, which identified inaccurate equipment ratings at seven more solar and wind facilities. These locations “documented accurate overall facility ratings but had included several inaccurate equipment ratings for individual elements in the workpapers supporting the facility ratings,” SERC said.
The RE determined that because of the length the inaccuracies persisted, FAC-008-5’s predecessors FAC-009-1 and FAC-008-3 were infringed as well. It attributed the root cause of the violations to a “programmatic failure resulting from deficient fleet-wide internal controls,” noting that DERS did not perform a secondary review to identify errors in the initial facility rating calculations and that “numerous errors in the initial … evaluation still occurred” despite the utility’s practice of capturing element ratings through nameplate photos.
SERC assessed the risk posed by the infringement as “elevated” because of the widespread nature of the issues, caused by the programmatic failure. The RE observed that running in excess of the facility rating, as occurred at three facilities, could lead to damaged equipment and outages, although this did not happen in practice. Also, SERC said the incorrect ratings could lead to system instability “because planning models and system operating limits would not accurately reflect the true limits of the facility.”
SERC and the other regions did not award mitigating credit for self-reporting because DERS submitted the reports after it was notified of an upcoming compliance audit.
Deriva took several actions to mitigate the noncompliance in addition to updating the element and facility ratings. These include updating the NERC implementation checklist to require a walkdown to verify ratings before registration, developing a new procedure for creating and updating the facility ratings spreadsheet, training relevant staff on documentation updates and completing on-site walkdowns of all appropriate facilities to verify ratings.