FERC staff: Entergy in violation of 16 NERC reliability requirements

Entergy (NYSE:ETR) has potentially violated a number of NERC reliability standards, according to a FERC notice issued to the company Nov. 20.

The staff of FERC’s Office of Enforcement said it had determined in a preliminary nonpublic investigation that Entergy violated 33 requirements of 16 NERC reliability standards “by failing to adequately perform critical functions required for reliable operation of its transmission system.”

The staff alleged that many of the violations were continuous and had been ongoing “for a period of several years.”

The investigation is not expected to have an impact on Entergy’s pending transmission merger with ITC Holdings (NYSE:ITC), an Entergy spokesperson said in an email to TransmissionHub. The companies submitted their application for FERC approval of the transaction on Sept. 24. 

“Entergy strongly disagrees with Staff’s preliminary conclusions that it violated reliability standards, but is cooperating in the investigation,” the spokesperson said. 

Among the reasons stated for the violations were that Entergy failed to consider certain protection system maintenance activities in its operations and planning studies; lacked a documented methodology for developing facility ratings for its transmission lines built before 1994; inadequately trained and failed to certify system operators at its regional transmission operations centers despite those operators sharing primary responsibility for the real-time operation of the interconnected bulk electric system (BES); failed to maintain accurate models in its operations, operations planning, and long-term planning tools; and failed to adequately protect critical infrastructure by neglecting to test a firmware upgrade before applying the upgrade in production mode.

Entergy allegedly also failed to ensure adequate and reliable telecommunications facilities, failed to maintain and test backup power supplies at vital telecommunications facilities, and lacked effective emergency operating plans.

“These findings were exposed during several communications outage events in 2008 and 2009, in which Entergy could not perform various monitoring and control functions required of it as a balancing authority and transmission operator,” the staff said.

The reliability standards that were allegedly violated include:

  • Normal operations planning (TOP-002-2b), according to which current operations plans and procedures are essential to being prepared for reliable operations, including response for unplanned events;

  • Transmission operations (TOP-004-2), to ensure that the transmission system is operated so that instability, uncontrolled separation, or cascading outages will not occur as a result of the most severe single contingency and specified multiple contingencies;

  • System performance following loss of a single BES element (TPL-002-0a), according to which system simulations and associated assessments are needed periodically to ensure that reliable systems are developed that meet specified performance requirements with sufficient lead time, and continue to be modified or upgraded as necessary to meet present and future system needs;

  • System performance following loss of two or more BES elements (TPL-003-0a), according to which system simulations and associated assessments are needed periodically to ensure that reliable systems are developed that meet specified performance requirements, with sufficient lead time and continue to be modified or upgraded as necessary to meet present and future system needs;

  • System performance following extreme BES events (TPL-004-0), according to which system simulations and associated assessments are needed periodically to ensure that reliable systems are developed that meet specified performance requirements, with sufficient lead time and continue to be modified or upgraded as necessary to meet present and future;

  • Facility ratings methodology (FAC-008-1), to ensure that facility ratings used in the reliable planning and operation of the BES are determined based on an established methodology or methodologies;

  • Establish and communicate facility ratings (FAC-009-1), to ensure that facility ratings used in the reliable planning and operation of the BES are determined based on an established methodology or methodologies;

  • Operating personnel training (PER-002-0), according to which each transmission operator and balancing authority must provide their personnel with a coordinated training program that will ensure reliable system operation;

  • Operating personnel credentials (PER-003-0), according to which certification of operating personnel is necessary to ensure minimum competencies for operating a reliable BES;

  • Telecommunications (COM-001-1.1), according to which each reliability coordinator, transmission operator and balancing authority needs adequate and reliable telecommunications facilities internally and with others for the exchange of interconnection and operating information necessary to maintain reliability;

  • Cyber security – systems security management (CIP–007–1), which requires responsible entities to define methods, processes, and procedures for securing those systems determined to be critical cyber assets, as well as the non-critical cyber assets within the electronic security perimeter(s);

  • Response to transmission limit violations (TOP-008-1), the purpose of which is to ensure transmission operators take actions to mitigate SOL and IROL violations;

  • System performance under normal (no contingency) conditions (Category A) (TPL-001-0.1), according to which system simulations and associated assessments are needed periodically to ensure that reliable systems are developed that meet specified performance requirements with sufficient lead time, and continue to be modified or upgraded as necessary to meet present and future system needs;

  • Plans for loss of control center functionality (EOP-008-0), according to which each reliability entity must have a plan to continue reliability operations in the event its control center becomes inoperable;

  • Monitoring system conditions (TOP-006-2), to ensure critical reliability parameters are monitored in real-time.

About Rosy Lum 525 Articles
Rosy Lum, Analyst for TransmissionHub, has been covering the U.S. energy industry since 2007. She began her career in energy journalism at SNL Financial, for which she established a New York news desk. She covered topics ranging from energy finance and renewable policies and incentives, to master limited partnerships and ETFs. Thereafter, she honed her energy and utility focus at the Financial Times' dealReporter, where she covered and broke oil and gas and utility mergers and acquisitions.