IID officials concerned about possible fallout from 2011 blackout

Officials with the Imperial Irrigation District (IID) in Southern California are concerned about the possibility of fallout from an investigation into the Sept. 8, 2011, blackout that left 2.7 million residents of Arizona, Baja California, and southern California without electricity.

While FERC and NERC issued a 153-page joint report May 1 about the blackout that included 27 recommendations intended to help industry operators prevent similar outages, IID officials point out the document was just a preliminary report.

“Now, they’ll start drilling down on the actual root cause to get down to look at it, to see what actually happened and what actually caused it,” Carl Stills, interim deputy manager of the IID’s energy department, told TransmissionHub Sept. 26.

While neither FERC nor NERC will comment on investigations or even confirm that an investigation is underway, Stills said his years in the business give him a good sense of what is likely going on behind the scenes.

“There will be further investigation … as to the root cause of the blackout,” he said.

While the IID was affected by the cascading outage that started with the loss of Arizona Public Service Co.’s (APS) Hassayampa-North Gila 500-kV line, Stills said, “Our [power] was restored rather quickly. We were actually up long before any of the coastal communities.”

While he can’t predict the final result of an investigation, “it could be that their further investigation exonerates us to a great extent.” It could also go the other way, he said.

Two areas of concern

The utility is primarily concerned about two possible actions that could stem from the investigation: monetary fines and loss of the ability to function as a balancing authority.

Because the utility provides cost-based service and is not a for-profit entity, any fines would be a hardship that could extend to its customers, something IID officials want to avoid.

“We have some of the lowest residential rates in southern California and it’s very important to the district that we protect that and keep those low rates for our customer base,” an IID spokesperson told TransmissionHub. “That’s one of our priorities.”

FERC can levy fines of up to $1m per violation, per day, and a large fine could affect their ratepayers.

“I don’t want to go on record now as saying [a fine] would impact our rates; we don’t know that for sure,” Stills added. “It would depend on whether we had the money in the bank to pay [the fines].”

Fines passed along to their ratepayers could result in higher electric rates for a population that can hardly afford it, Stills said, noting that the Imperial Valley’s unemployment rate is currently close to 30%, meaning it is already difficult for many customers to pay their electric bills.

Another possible consequence could be the loss of authority to function as its own balancing area.

The utility is concerned that FERC might use fines as a means to compel the IID to join the Cal-ISO rather than maintaining its own balancing control area. Even if that happened, Stills said, it could still come down to which alternative made the most economic sense. “Our cost, just to put our system into the Cal-ISO, would be much higher than we’re paying now,” he said.

In addition to loss of the IID’s independence, Stills said a move to the ISO could adversely affect the utility’s customers.

“We have greater responsibilities [to our customers than would the ISO],” he said. “We want to maintain our rates, and I can tell right you now, their transmission rates are double ours, and it just wouldn’t be … economically advantageous to [join the ISO].”

In addition, he said, the IID and its customers might not be the ISO’s top priority.

”We’re in an extreme temperature [zone],” he said, citing summertime temperatures that frequently reach 115° F. “With the extreme temperature, I’m just not sure Cal-ISO would have us as a priority in another major outage.”

Stills is not even convinced that greater reliability would result.

“They’re not infallible; in fact, they’ve had a lot of outages. And for us to put our ratepayers at a lower priority for getting energy back [on] so they can run their air conditioners could be a life-or-death situation for some of the old people who couldn’t bear up under the heat,” he said.

System improvements already underway

IID officials are hopeful that any investigation will take into consideration steps they have taken to enhance system reliability in the wake of the blackout.

“We focus on how to continually improve the system,” Stills said. “We have already changed some things to prevent these types of situations” from recurring.

Since the joint FERC/NERC report was issued, the IID has moved a 300 MVA transformer to its Coachella Valley substation, and placed in parallel the two existing 150 MVA transformers, giving it effectively two 300 MVAs, which doubles the capacity through the transformer on that transmission path, he said.

The Coachella Valley transformers were cited in the FERC/NERC report as a facility that contributed to the outages.

“IID was aware of the potential for local cascading if the [Coachella Valley] transformers tripped,” the report said, adding that IID knew that a trip of the Coachella Valley transformers would result in the trip of a transformer at its Ramon substation, and a tie-line to San Diego Gas & Electric (SDG&E) would overload as a result.

Stills said the steps IID has taken has corrected that situation.

“We’ve had three situations already where we may have had experienced outages on our system, but because of that transformer move and because we’ve raised our relay settings up to the FERC report-recommended 150% of our thermal ratings,” IID has significantly reduced the number of outages on that path, Stills said.

In addition, the IID has added an audible alarm to its operations center to provide an earlier warning when approaching an overload situation.

“We’re doing a number of things proactively to increase the reliability of the system,” he said. “I’m sure FERC will be noting all the steps we’ve taken to make the system more robust.”

Facing the unknown

Despite the concerns, which are very real, Stills said the IID can’t predict the outcome of any investigation that may be underway. “If there is a fine, we don’t know what the extent of the fine will be, and until we know that, we don’t know what action we’re going to take,” he said.

The outcome of any investigation likely won’t be known for up to another year, Stills estimated. Only when any investigation is concluded and the results made public will the utility know for certain what, if any, repercussions it will face.

APS is a subsidiary of Pinnacle West Capital (NYSE: PNW).

SDG&E is a subsidiary of Sempra Energy (NYSE:SRE).