Broad River Energy’s $115,000 Penalty for Violations of VAR-002-4 R2 and PRC-005-1b R2 and PRC-005-6 R3

Broad River Energy, LLC, notified SERC that it was noncompliant with VAR-002-4 R2. Broad River failed to maintain the generator voltage schedule provided by the Transmission Operator (TOP), or otherwise meet the conditions of notification for deviations from the voltage or Reactive Power schedule provided by the TOP. SERC determined that this violation spanned to VAR-002-4.1 R2. On October 18, 2019, SERC sent Broad River a Spot-Check notification letter notifying it of a compliance Spot-Check scheduled for October 21, 2019, through December 13, 2019. SERC’s Spot-Check request for evidence asked Broad River to submit evidence of VAR-002-4 R2 compliance for the audit period August 1, 2015 through October 18, 2019. In response, Broad River ran a complete voltage profile for the entire audit period. During this period, Broad River’s TOP provided Broad River a different voltage schedule each quarter for a total of 18 different voltage schedules. The TOP established the voltage schedule bounds based on seasonal peak/off peak values with a schedule bound of +/-2kV. By comparing the voltage schedules to the voltage profile and the logbook entries, Broad River determined there were a total of 419 excursions where the Facility was outside of the voltage schedule for 30 minutes or longer. Of the 419 excursions, there were 57 logbook entries made where the Broad River Operators notified the TOP that the plant could not meet the voltage schedule, and there were 362 instances where Broad River did not make a notification to the TOP when Broad River was not able to meet its voltage schedule. This violation began on August 5, 2015, the first time during the audit assessment period when Broad River failed to meet its voltage schedule and failed to notify the TOP, and ended on March 7, 2019, the last time during the audit assessment period when Broad River failed to meet its voltage schedule and failed to notify the TOP. Additionally, Broad River notified SERC that it was noncompliant with PRC-005-6 R3. Broad River failed to maintain its Protection System, Automatic Reclosing, and Sudden Pressure Relaying Components included within the time-based maintenance program in accordance with the minimum maintenance activities and maximum maintenance intervals prescribed within the applicable tables. SERC later determined that this violation began under PRC-005-1b R2 and spanned to PRC-005-6 R3. On June 11, 2020, Broad River stated that it was unable to confirm it completed all testing as required in accordance with the Standard. Broad River found there were components that the previous operator tested pursuant to its Protection System Maintenance Program (PSMP) Summary Table that Broad River inherited from the previous owners, but no documentation could be located to support the testing. Broad River also found the previous owners did not perform Components/Testing Requirement Timing represented in the PRC-005 PSMP Summary Table in a timely manner. Lastly, the previous owners did not include certain Components/Testing Requirements in the inherited PSMP Summary Table. To determine the scope of the violation, Broad River completed a walk-down of its sole facility to identify all equipment that must meet the requirements of PRC-005-6 and reviewed the associated test records to determine if it had evidence of compliance for each piece of equipment. Broad River identified 504 devices that are required to meet the requirements of PRC-005-6, but it could not provide evidence that it tested and maintained the devices within the defined intervals in the applicable tables for 435 devices (86%). The only device type that Broad River has evidence of the completion of the required maintenance and testing activities within the required intervals for all devices was batteries. It was unable to provide test records for a number of devices as of its registration date of December 27, 2012. As a result, this violation began under PRC-005-1b R2 and spanned to PRC-005-6 R3. It tested the final outstanding device on November 5, 2021. The violation began on December 27, 2012, when Broad River registered and did not have evidence of compliance, and ended on November 5, 2021, when it completed the required maintenance and testing activities by testing the final outstanding device.

VAR-002 Violation

Cause

The cause of the violation was organizational silos composed of inadequate communication between (1) third-party plant and asset manager and senior management, and (2) plant management and employees responsible for compliance. These silos resulted in inadequate management oversight, which led to a lack of an effective internal control and inadequate training on the VAR-002-4 compliance requirements. Specifically, Broad River’s management failed to put a control (i.e., alarming) in place to ensure operators were notified if voltage schedule limits were reached. It also failed to provide reinforcement training to the operators on the VAR-002-4 compliance requirements.

Disposition

SERC determined that the number of instances and long duration for the violations caused by silos between different levels of management and those responsible for implementing the processes indicated the prior management’s ignorance of the violations, and SERC aggravated the penalty as a result.

SERC considered Broad River’s compliance history and determined there were no relevant instances of noncompliance.

SERC reviewed Broad River’s internal compliance program in effect at the time of the violations and considered it to be a neutral factor in the penalty determination.

Broad River received cooperation credit for its cooperation, willful mitigation, and timely responses.

Broad River did not receive mitigating credit for self-reporting because the Self-Report was submitted after receiving notice of an upcoming Spot-Check.

SERC awarded credit because Broad River agreed to settle the violations thereby avoiding a hearing on this matter. A penalty of $115,000 was levied which considered a violation of PRC-005 as well.

Violation of PRC-005

Cause

The cause of the violation was organizational silos composed of inadequate communication between (1) third-party plant and asset manager and senior management, and (2) plant management and employees responsible for compliance. These silos resulted in inadequate management oversight. Over the years, Broad River’s plant changed ownership. There were changes in service providers for operation and maintenance activities, which resulted in different systems to capture, file, and maintain evidence to support compliance. In the transfer of these files, Broad River believes testing evidence was either missing or not transferred by the previous owners. Also, the tracking sheets, which the previous owners transferred over, did not include devices that are part of the Protection System. Broad River did not receive well organized, adequate evidence and documentation from the previous owners. Additionally, it failed to sufficiently implement the site into its existing compliance program after the purchase.

Disposition

SERC determined that the number of instances and long duration for the violations caused by silos between different levels of management and those responsible for implementing the processes indicated the prior management’s ignorance of the violations, and SERC aggravated the penalty as a result.

SERC considered Broad River’s compliance history and determined that it would not serve as an aggravating factor in the penalty determination. Broad River’s relevant prior noncompliance with PRC-005-6 R3 includes NERC Violation ID SERC2018020651. In SERC2018020651, Broad River failed to meet the Implementation Plan requirements for batteries. The mitigating activities in the prior noncompliance involved Broad River implementing a PRC-005-6 tracking sheet that supplies the date that the next tests are due. While the prior instance is similar in nature to the instant violation, the prior mitigation plan would not have prevented the instant violation because the instant violation involved several different issues arising out of transitioning ownership from previous owners to the current owners. For example, the instant violation involved factors such as the inability to locate evidence and insufficient managing of program implementation, among other factors, which would not have been prevented from a tracking sheet of testing due dates. Additionally, the prior noncompliance was a minimal risk issue processed as a Compliance Exception.

SERC reviewed Broad River’s internal compliance program in effect at the time of the violations and considered it to be a neutral factor in the penalty determination. Broad River received cooperation credit for its cooperation, willful mitigation, and timely responses.

Broad River did not receive mitigating credit for self-reporting because it reported the violation through the self-certification process.

SERC awarded credit because Broad River agreed to settle the violations thereby avoiding a hearing on this matter. A penalty of $115,000 was levied which included consideration of a VAR-002 violation.