AICPA SOC Service Organizations - Certrec

American Transmission Co. LLC (ATC) Penalized $75,000 for Noncompliance with FAC-008-3 R6

Summary of NERC Penalties









Quarter 1 - January 2024

American Transmission Co. LLC (ATC)

NERC's Regulations

FAC-008-3 R6

Inaccurate Facility Ratings due to multiple database inconsistencies and manual errors, it was self-reported. This issue involved 47 Facility Rating errors across transmission lines and substations, highlighting systemic data management and internal control flaws.



American Transmission Co. LLC (ATC) submitted a Self-Report stating that, as a Transmission Owner (TO), it was in noncompliance with FAC-008-3 R6. The Entity submitted a subsequent Self-Log of FAC-008-3 R6 in Q1 2018. After further review, MRO determined that it would process the issues under the same violation number. MRO determined the start date of the issue was prior to the effective date of FAC-008-3 R6, therefore, MRO is processing the noncompliance under FAC-009-1 R1. The Entity is a Multiregional Registered Entity and participates in the Coordinated Oversight Program and is registered in both the MRO and ReliabilityFirst regions. This violation occurred in both regions. In the initial submittal, the Entity did not accurately record the segment temperature of a winter season line segment, resulting in an incorrect Facility Rating. The Entity submitted two additional issues. The Entity discovered a bus section rating that did not reflect an equipment rating and a line conductor rating discrepancy that affected the transmission line Facility Rating. As a result of the discovery of these issues, the Entity independently performed evaluations of its data sets and identified four data sets as having the potential to contain Facility Rating errors. The Entity discovered equipment data discrepancies through the Entity’s internal reviews resulting in the identification of 47 Facility Rating errors (less than 5% of ATC’s facilities). Of the 47 Facility Rating errors, 46 involved Transmission Line ratings and one involved a substation rating. The Entity had previously performed a field verification of both bulk electric system (BES) substation equipment and non-BES substation equipment from 2015-2017 as an extension of the 2010 NERC Facility Ratings Alert.

Additional Discussion:

The cause of the noncompliance was a combination of the existence of multiple databases for equipment rating data, and a lack of internal controls for maintaining consistency of the data sets. Additional contributing causes included the Entity’s failure to update the status of new Facilities and manual data entry errors.

The violation began on December 10, 2009, when the Entity incorrectly record the first Transmission Line Facility Rating, and ended on August 8, 2022, when ATC corrected all rating discrepancies.

Risk Determination

The violation posed a moderate risk and did not pose a serious or substantial risk to the reliability of the bulk power system (BPS). Inaccurate Facility Ratings may unnecessarily limit the operation of the system or allow for operation beyond the point where equipment can function reliably potentially resulting in damage to the limiting element failure, and an outage of the Facility. The actual risk to the BPS was determined to be moderate but not serious or substantial. The Entity’s equipment rating errors resulted in 47 Facility Rating errors, which is less than 5% of the Entity’s facilities. Of the 47 Facility Rating errors, 46 involved Transmission Line ratings and one involved a substation rating. Nineteen of these Facility Ratings were lower than the actual rating of the most limiting element, resulting in operational limitations that were artificial and may have prevented System Operators from utilizing the full capability of these Facilities to reliably operate the system. MRO determined that these Facility Rating errors individually posed a minimal risk to the BPS, however, the collective nature elevated the risk to moderate.

The remaining 28 incorrect Facility Ratings were higher than the actual rating of the most limiting element, posing a potential risk of equipment overloads and resulting damage to critical equipment. The Rating errors associated with six higher-risk Facilities (one 345-kV bus section, four 345-kV lines, and one 138-kV line that is part of a designated Cranking Path for nuclear off-site power restoration) pose a moderate risk to the BPS. The ratings decrease for these higher-risk Facilities ranged from 2.5% to 27% and existed for nonconsecutive periods of up to five years. Historical loading data showed that during the periods of noncompliance, the Entity did not operate any of the 345-kV Facilities over the corrected rating. However, the Entity operated the 138-kV Cranking Path Facility up to 1.7% over the corrected rating for a period of five minutes. The Blackstart Resource utilized in this portion of the System Restoration Plan consists of four units with a specified summer capacity of 40 MW and a winter capacity of 60 MW. This posed a moderate risk to the BPS as the line could have failed due to overload during the execution of the System Restoration Plan, resulting in an inability to provide necessary off-site power for safe shutdown of a nuclear plant. Furthermore, the issue existed for a period of approximately 8 years. However, the risk was not serious or substantial because the 138-kV Cranking Path overload was small enough in magnitude and duration that damage to equipment was highly unlikely. Furthermore, analysis of System Restoration data shows that load on this line is highly unlikely to be near its rating during an actual System Restoration event. Additionally, three of the 345-kV Facilities with decreased ratings were adjacent to other Facilities that effectively limited their loading to less than the corrected Ratings. The Entity did not operate the remaining two 345-kV Facilities with decreased ratings over 50% of their corrected ratings during their respective periods of noncompliance. No harm is known to have occurred.


MRO reviewed ATC’s internal compliance program (ICP) and considered it to be a mitigating factor in the penalty determination. ATC’s ICP has structures in place that promote internal self-identification and analysis of potential noncompliance. The ICP has processes in place for defining the operational leadership of compliance, documenting or tracking near misses, and for the anonymous reporting of compliance concerns. The ICP empowers the individual with day-to-day supervision of NERC Compliance go directly to the most senior leader and/or the Board and has processes to involve senior leadership throughout the noncompliance process. In addition, when a potential noncompliance occurs, the ICP directs operational staff to be involved in the investigation of noncompliance and the creation of mitigation and has a process in place to delegate ownership and tracking of mitigation to the appropriate subject matter expert(s). The Entity was transparent throughout the reporting and mitigation process. Additionally, ATC continues to identify and implement robust internal controls to enhance its Facility Ratings process to continue prompt identification of potential issues. ATC has implemented a series of internal controls and quality assurance checkpoints to maintain accuracy of the Facility Ratings database. In addition, MRO gave ATC mitigating credit for self-reporting and cooperation.

MRO considered ATC’s compliance history in determining the penalty and disposition track (MRO2014014478 and MRO2017017988). MRO determined that ATC’s compliance history should not serve as a basis for aggravating the penalty because both issues were identified through internal controls and processes that ATC had in place at the time. Once identified, ATC promptly mitigated the issue and took action to prevent recurrence. Both prior issues were determined to be minimal risk and processed as Compliance Exceptions, therefore are not considered as part of compliance history for penalty determination.

A penalty of $75,000 levied.

About Certrec:
Certrec is a leading provider of regulatory compliance solutions for the energy industry with the mission of helping ensure a stable, reliable, bulk electric supply. Since 1988, Certrec’s SaaS applications and consulting expertise have helped hundreds of power-generating facilities manage their regulatory compliance and reduce their risks.

Certrec’s engineers and business teams bring a cumulative 1,500 years of working experience in regulatory areas of compliance, engineering, and operations, including nuclear, fossil, solar, wind facilities, and other Registered Entities generation and transmission.

Certrec has helped more than 120 generating facilities establish and maintain NERC Compliance Programs. We manage the entire NERC compliance program for 60+ registered entities in the US and Canada that trust us to decrease their regulatory and reputational risk. Certrec is ISO/IEC 27001:2013 certified and has successfully completed annual SOC 2 Type 2 examinations.

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