4th California blackout FERC enforcement case settles

Federal regulators have approved a settlement with another federal agency over its role in a 2011 blackout in California, Arizona, and Mexico.

On September 8, 2011, the Southwest's electric grid was hit with a widespread power outage that left over 5 million people in California, Arizona and Baja California, Mexico, without power for up to 12 hours.  Previous investigations by the Federal Energy Regulatory Commission (FERC) and the North American Electric Reliability Corporation (NERC) found that the blackout occurred when Arizona Public Service Company's 500-kilovolt Hassayampa-N.Gila transmission line tripped out of service, overloading the remaining elements of the regional grid. 

Earlier this year, FERC approved stipulations and consent agreements among its Office of Enforcement, NERC, and three public utilities.  Arizona Public Service agreed to pay $3.25 million in civil penalties, California's Imperial Irrigation District agreed to a $12 million settlement, and  Southern California Edison Company agreed to pay a $650,000 civil penalty and undertake additional compliance actions.

FERC approved a fourth settlement on November 24, 2014, with the Western Area Power Administration – Desert Southwest Region (Western-DSW).  One of four power marketing administrations within the United States Department of Energy, the Western Area Power Administration (WAPA) markets and transmits electricity to a fifteen-state region from hydroelectric power facilities at the Hoover, Parker, and Davis dams. Western-DSW is one of four regions carrying out this mission for WAPA, serving customers in Arizona, Southern California, and Southern Nevada. It sells more than ten billion kilowatt hours of hydroelectric power to approximately seventy municipalities, cooperatives, federal and state agencies, and irrigation districts. Western-DSW also operates and maintains more than forty substations and 3,100 miles of transmission lines.

In the FERC Order Approving Stipulation and Consent Agreement, the Commission notes that Western-DSW violated four Requirements of three Reliability Standards in the Transmission Operations (TOP) and Voltage and Reactive Control (VAR) categories. These groups of standards cover the responsibilities and decision making authority for reliable operations and maintenance of Bulk Power system facilities within voltage and reactive power limits to protect equipment and ensure reliable operation of the interconnection.  In particular, FERC Enforcement staff and NERC found that Western-DSW failed to operate its portion of the transmission system within voltage system operating limits and to maintain sufficient situational awareness prior to and during the event, undermining reliable operation of the Bulk Power System.

Western-DSW stipulated to the facts in the agreement and agreed to implement compliance measures necessary to mitigate the violations and improve overall reliability, including improving its models, better coordination with neighboring entities, and improving its situational awareness by adding a real-time monitoring tool that analyzes and alerts operators to potential contingencies. Western-DSW also agreed to make semi-annual compliance reports to Enforcement staff and NERC for at least one year.  Notably, the stipulation does not require Western-DSW to pay a civil penalty.

FERC's general investigative report on the incident identified six potential targets for enforcement action.  With cases settled against Western-DSW, SoCal Edison, the Imperial Irrigation District, and Arizona Public Service, only the California Independent System Operator and the Western Electricity Coordinating Council Reliability Coordinator have not yet been parties to a stipulation and consent agreement.