AICPA SOC Service Organizations - Certrec

Entity Receives $20,000 Penalty for Violation of Prc-005-6 Related to Acquired Assets

Summary of NERC Penalties









Quarter 1

2/7/18 –



Protection Systems were not compliant with 

PRC-005-6 R3 and required mitigation.

Protection and Control (PRC) Standard

PRC-005-6 R3


ITC , on October 4, 2019, submitted a Self-Report to ReliabilityFirst stating that, as a Transmission Owner, it was in violation of PRC-005-6 R3. This violation relates to the entity’s acquisition of the Dearborn Industrial Generation (DIG) site Protection System assets. On July 2, 2018, the entity acquired the six substations at issue from Ford, Cleveland-Cliffs, and DIG. The Assets include 230 kV and 120 kV Protection Systems that also interconnect with 844 MW of generation. After reviewing the Protection System maintenance and testing data provided by the prior owners of the Assets, the entity concluded that there were 29 Protection Systems that were not compliant with PRC-005-6 R3 and required mitigation. More specifically, the entity concluded that the prior owners did not perform relay scheme maintenance for 44 relay schemes. The entity has now performed all of the overdue relay scheme maintenance. The process to remediate the PRC-005-6 R3 violation took an extended amount of time because it is difficult to get outages for the industrial customers approved to perform the overdue maintenance. The root cause of this violation is that the previous owners did not perform maintenance on any of the aforementioned relay schemes and their components. This violation involves the management practice of external independencies. The violation began on July 2, 2018, the date the entity acquired the assets at issue in this Self-Report. The violation ended on December 3, 2021, the date the entity completed all of the overdue relay scheme maintenance.

Determination of Penalty ($20,000)

When assessing the penalty for the violations at issue, ReliabilityFirst considered the presence and operation of a quality compliance program as well as other indicators of a culture of compliance at the entity. This was evidenced by the fact that the violations at issue in this Agreement were proactively identified and reported by the entity after acquiring the Assets. The entity’s internal controls helped identify the violations and the entity ran thorough extent of conditions for the violations to determine the scope of each violation. The entity has spent considerable resources to identify all of the violations, to mitigate the violations, and to integrate the Assets into its NERC Compliance Program which will help prevent recurrence. The entity’s actions identified, addressed, and eliminated longstanding Bulk Electric System (BES) risk for these Assets. Therefore, ReliabilityFirst is awarding a significant amount of internal compliance program credit to encourage this sort of behavior by ITCT and other Registered Entities in the future.


This violation posed a moderate risk and did not pose a serious or substantial risk to the reliability of the bulk power system (BPS) based on the following factors. The risk posed by not performing relay scheme maintenance for 44 relay schemes across six substations is that the relays could fail to operate as expected, which could reduce the reliability of the BPS. The risk is not minimal because of the long duration of the violation. The risk is not serious because these substations primarily serve industrial load, meaning that if the relays failed to operate, the impact on the BPS would likely be minimal. ReliabilityFirst notes that there have been no failures at the DIG site due to insufficient maintenance on the relays.


To mitigate this violation, the entity has performed the following actions:

1) completed maintenance at Dearborn Sub 41 DC Supply;
2) completed maintenance at Dearborn 48/49 DC Supply;
3) completed protection system maintenance on the equipment associated with the Ford #1, including Dearborn Generation 48/49 Breaker P;
4) completed protection system maintenance on Substation 42 breakers;
5) completed maintenance on Double Eagle #1 line and Dearborn Generation 41 Transformer E (including breakers at 99 and 41); and
6) completed maintenance on Warren-Navarre-Dig lines Dearborn Generation 42 Transformer N protection and breaker 42005.
7) completed maintenance on Double Eagle #2 line and Dearborn Generation 41 Transformer F (including breakers at 99 and 41);
8) completed maintenance on Ford #2 and Transformer M; and
9) completed maintenance on Bus Relaying at Dearborn Generation 99.

In addition, the entity integrated the relays into its NERC Compliance Program to prevent recurrence of the violation.

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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