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News Release: May 26, 2015
Docket No. IN14-11-000
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FERC Approves Final Settlement in 2011 Southwest Blackout Case

The Federal Energy Regulatory Commission (FERC) today approved the sixth and final settlement related to the 2011 outage that left more than 5 million people in Southern California, Arizona and Baja California, Mexico, without power for up to 12 hours.

Today’s stipulation and consent agreement involves FERC’s Office of Enforcement, the North American Electric Reliability Corporation (NERC), the Western Electricity Coordinating Council (WECC) and Peak Reliability, WECC’s successor as Reliability Coordinator. The settlement calls for WECC to pay a $16 million civil penalty and marks final resolution of the investigation by FERC Enforcement staff and NERC into the Sept. 8, 2011, Southwest blackout.

At the time of the event, WECC as Reliability Coordinator was responsible for maintaining a wide-area view of the Western Interconnection, which extends from Canada to Mexico, and includes all or part of 13 states and a population of 78 million.

Enforcement staff and NERC determined that WECC as the Reliability Coordinator violated nine requirements of the Interconnection Reliability Operations and Coordination (IRO) and the Facilities Design, Connection and Maintenance (FAC) groups of Reliability Standards. The IRO Standards detail the responsibilities and authorities of the Reliability Coordinator and establish requirements for data, tools and the wide area view necessary to ensure the reliable operation of the grid. The FAC standards involved aim to ensure that System Operating Limits are based on an established methodology.

Enforcement staff and NERC concluded that WECC failed to identify and prevent violations of system operating limits and Interconnection Reliability Operating Limits and was unaware of the impact of protection systems, including the S-Line remedial action scheme and separation scheme at the San Onofre switchyard. WECC also used an inadequate system operating limit methodology that exposed its area to cascading outages.

WECC and Peak stipulated to the facts in the agreement, and WECC agreed to pay the $16 million civil penalty, of which $3 million will be split evenly between the U.S. Treasury and NERC, and $13 million will be invested in reliability enhancement measures that go above and beyond mitigation of the violations and the requirements of the Reliability Standards. WECC and Peak also agreed to mitigation and reliability activities and to submit to compliance monitoring. WECC neither admits nor denies that its actions constituted violations of the Reliability Standards.

In earlier settlements, Arizona Public Service Company, Imperial Irrigation District, California Independent System Operator Corporation, and Southern California Edison Company agreed to pay civil penalties of more than $21 million, with cash penalties of more than $7 million shared between the U.S. Treasury and NERC, and credits for enhancements to the reliability of the grid above and beyond the requirements of the Reliability Standards and required mitigation that included a utility-scale battery storage system, an innovative system for visualizing real-time system conditions, equipment to maintain system voltage in vulnerable areas, and additional system operators for the Reliability Coordinator, among other improvements.