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Power & Pipes

FERC, CFTC, and State Energy Law Developments

On August 29, the Commission approved a $350,000 settlement between the Grand River Dam Authority, NERC, and FERC to settle allegations of Reliability Standard violations By the Grand River Dam Authority, an Oklahoma state agency. NERC and the Commission ultimately concluded that the Grand River Dam Authority violated 52 Requirements in 19 Reliability Standards. This appears to be the first settlement of a reliability investigation By the Commission that was not explicitly tied to a bulk-power system incident.

The more serious violations included the following:

  • The failure to perform or use the planning studies needed to assess day-ahead and current system conditions and to prepare for emergencies.
  • The failure to notify the Reliability Coordinator when high-speed relaying was disabled.
  • The use of a substandard communication network for monitoring and controlling the system.
  • The failure to report a transformer fault that led to 30 protection system operations.
  • The failure to have an established facility ratings methodology.
  • The failure to perform long-term transmission system planning assessments.

Commission Staff, as reflected in the settlement agreement, ultimately concluded that these violations were “serious deficiencies undermining reliable operation” of the Grand River Dam Authority’s system, and that these violations “resulted from a lack of direction from within the organization necessary to create the mechanisms and incentives to ensure attention to and compliance with the Reliability Standards.”

In addition to the monetary sanction, which will be split between the U.S. Treasury and NERC, the Grand River Dam Authority agreed to complete 14 separate mitigating actions and to undertake seven additional compliance measures, at a cost of $2 million. These additional compliance measures include communication network upgrades, the implementation of new transmission outage application suite software, the installation of standBy generators at microwave repeater sites, the separation of the corporate and system operations communication networks, and the creation of a new CIP compliance supervisor position.