AICPA SOC Service Organizations - Certrec

Avangrid Received a Penalty of $615,000 for Numerous Facility Ratings Violations

Summary of NERC Penalties









Quarter 4 - September 2023


FERC's Regulations

FAC-009-1 R1, FAC-008-3 R6, and FAC-008-5 R6

Avangrid, encompassing companies like New York State Electric & Gas, was fined $615,000 for breaches of Facility Ratings Standards, notably violations of FAC-009-1 R1, FAC-008-3 R6, and FAC-008-5 R6. These infringements posed risks to the Bulk Power System. 17% of Avangrid's facilities had errors, with 7.7% needing rating reductions. These consistent issues highlight a systemic problem with their Facility Ratings, resulting in the penalty.


New York State Electric & Gas Corporation, Rochester Gas and Electric Corporation, Central Maine Power Company, Maine Electric Power Company, and United Illuminated Company (Avangrid) was penalized $615,000 for violations on Facility Ratings Standard requirements. The Penalty resolves seven violations of Facilities Design, Connections, and Maintenance (FAC) Reliability Standards, specifically FAC-009-1 R1, FAC-008-3 R6, and FAC-008-5 R6, three of which the NPCC determined posed a serious risk and four of which the NPCC determined posed a moderate risk to the reliability of the Bulk Power System (BPS). In total, Avangrid discovered errors at 119 out of their 704 total Facilities (17 percent), with 54 Facilities (7.7 percent) requiring a rating decrease ranging from 2 percent to 70 percent. Additionally, none of the derates resulted in Avangrid operating above the correct Facility Rating over the past three years. The violations are indicative of a long-standing, systemic issue with Facility Ratings.

Extent of Condition

Avangrid performed an EOC review and found numerous instances of inaccurate Facility Ratings, but none of the derates involved resulted in Avangrid operating above the correct Facility Rating over the past three years. The issue resulted in 41 NYSEG Facilities (5.6 percent of Avangrid Facilities), 2 RG&E Facilities (0.3 percent of Avangrid Facilities), 72 CMP Facilities (10.2 percent of Avangrid Facilities), 4 MEPCO Facilities (0.6 percent of Avangrid Facilities), and no UI Facilities requiring a Facility Rating change. Of these, 14 NYSEG Facilities and 40 CMP Facilities required a decrease ranging from 2 percent to 70 percent. Avangrid expects to complete its EOC walkdowns of all its Facilities by the end of 2024. While no Facility Ratings inaccuracies were identified for UI, UI was unable to locate engineering documentation to support some Facility Ratings and there was not a clear identification as to what version of the Facility Rating Methodology UI had used.


The cause of this violation was (1) ineffective interdepartmental coordination or silos between departments; (2) inadequate internal controls for ensuring the accuracy of Facility Ratings; (3) lack of Company-wide rating modification process; and (4) inadequate ratings validation program, including but not limited to a process of reviewing equipment ratings during the transition from a manually maintained database to the current thermal limit database software.

Basis for Penalty

The NPCC has assessed a penalty of six hundred fifteen thousand dollars ($615,000) for the referenced violations. In reaching this determination, NPCC considered the following factors: 

1. Three of the seven violations posed a serious risk to the reliability of the BPS.

2. The Entity self-reported all of the violations, but two did not warrant self-reporting credit as they were discovered due to the NPCC self-certification process. 

3. The Entity was cooperative throughout the compliance enforcement process.

4. The Entity agreed to the settlement and admitted to the violations.

5. There were no other mitigating or aggravating factors or extenuating circumstances that would affect the assessed penalty/disposition method. 

After consideration of the above factors, NPCC determined that, in this instance, the penalty amount of six hundred fifteen thousand dollars ($615,000) is appropriate and bears a reasonable relation to the seriousness and duration of the violations.

The Company

Avangrid is headquartered in Orange, Connecticut, and has a footprint in 24 states with $41 billion in assets. Its primary businesses are Networks (including NYSEG, RG&E, CMP, MEPCO, and UI) that serve 3.3 million electric and natural gas customers in the Northeast, and Renewables, the third-largest renewable energy company in the U.S. with a diverse onshore and offshore renewable energy portfolio. NYSEG, RG&E, CMP, MEPCO, and UI are subsidiaries of Avangrid. NYSEG operates approximately 35,000 miles of electric distribution lines and 4,500 miles of electric transmission lines across more than 40% of upstate New York. It serves approximately 907,000 electricity customers. RG&E operates approximately 8,900 miles of electric distribution lines and 1,100 miles of electric transmission lines. It serves approximately 385,900 electricity customers in a nine-county region in New York surrounding the City of Rochester. CMP is Maine’s largest electricity transmission and distribution utility. CMP operates approximately 23,500 miles of distribution lines and 2,900 miles of transmission lines. CMP serves approximately 646,000 customers across 346 communities in central and southern Maine. MEPCO is partially owned by CMP, which has a 78 percent ownership interest. MEPCO owns and operates a 345kV transmission interconnection extending from Wiscasset, Maine to the Maine-New Brunswick international border at Orient, Maine, where it interconnects with the New Brunswick Power Corporation’s facilities in the province of New Brunswick, Canada. UI operates approximately 3,600 miles of electric distribution lines and 138 miles of transmission lines. UI serves approximately 341,000 customers in the greater New Haven and Bridgeport areas of Connecticut.

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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