• FERC Settles 3rd Southwest Blackout Case
  • December 19, 2014
  • Law Firm: Preti Flaherty Beliveau Pachios LLP - Portland Office
  • A California public utility has settled claims by federal electricity regulators related to the September 8, 2011, blackout in the southwestern United States. Following an investigation by the Federal Energy Regulatory Commission (FERC) and electric reliability organization North American Electric Reliability Corporation (NERC), Southern California Edison Company has agreed to pay a $650,000 civil penalty and undertake additional compliance actions.

    According to previous investigative reports, the 2011 blackout started when a 500-kilovolt transmission line owned by Arizona Public Service Company tripped out of service, causing cascading power outages through automatic load shedding as other equipment quickly overloaded. In the end, the outage affected over 5 million customers, shedding 7,835 megawatts of peak demand and over 30,000 megawatt-hours of energy.

    Following the blackouts, both FERC and NERC launched investigations into what had happened. As a federal agency, FERC has regulatory authority over the reliability of the electric bulk power system. NERC is a not-for-profit international regulatory authority whose mission is to ensure the reliability of the bulk power system in North America, and has been designated by FERC as the nation's electric reliability organization.

    In July, FERC announced a $3.25 million settlement with Arizona Public Service. In August, FERC announced a $12 million settlement with California's Imperial Irrigation District.

    Today, FERC announced that it has approved a stipulation and consent agreement between FERC’s Office of Enforcement, NERC, and Southern California Edison Company. Through a joint investigation, FERC Office of Enforcement staff and NERC determined that the utility violated the Protection and Control group of NERC's Reliability Standards. In particular, the investigation found that Southern California Edison failed to adequately coordinate its intertie separation scheme at the San Onofre nuclear generating station switchyard with certain other protection systems. Enforcement staff and NERC found this violation to be a serious deficiency that undermined reliable operation of the Bulk Power System.

    Through the settlement, Southern California Edison will pay a civil penalty of $650,000. Of this penalty, $125,000 will be paid to the U.S. Treasury, $125,000 will be paid to NERC, and $400,000 will be invested in additional reliability enhancement measures.

    With Southern California Edison's case resolved, all three of the vertically integrated utilities known to be implicated by FERC's investigation have now settled their alleged violations by agreeing to pay penalties. Will further penalties be forthcoming? Will the penalties and ordered reliability measures keep the lights on the next time the grid is stressed?