On June 23, 2010, FERC approved an Audit Report (the “Audit”) from the Division of Audits in the Office of Enforcement (“OE”) along with Staff from the Office of Electric Reliability.  The Audit evaluated Florida Reliability Coordinating Council, Inc.’s (“FRCC”) Regional Entity (“RE”) function and related compliance. FRCC was the subject of a settlement in March 2010 where the Commission issued a $350,000 civil penalty for its part in the February 26, 2008 power outage in southeastern Florida (see March 12, 2010 edition of the WER).

The Commission relied on the Audit to evaluate whether FRCC RE is “sufficiently independent from” the FRCC Member Services Division.  Staff presented a draft audit report on December 28, 2009, with revisions and comments on January 27, 2010.  Despite steps taken by FRCC to separate the FRCC RE and FRCC Member Services activities, several areas of concern remained in the Audit. 

In the Audit, Staff identified several areas of concern.  This includes: (1) FRCC’s Compliance Committee inappropriately influenced the implementation of the Compliance Monitoring and Enforcement Program; (2) FRCC RE’s process for evaluating misoperations was inadequate; (3) FRCC is registered as both a Reliability Coordinator and a Planning Authority, would could create a conflict of interest; (4) Staff members performing both Regional Entity and Members Services duties have prepared Reliability Assessments, which now must be evaluated independently by RE staff; (5) FRCC has failed to evaluate if staff-estimated percentages for allocating costs are reasonable; and (6) FRCC has not sufficiently monitored its staffing requirements.  The Audit recommended that FRCC address each of these issues moving forward.

FRCC accepted almost all of the recommendations in the Audit, but maintained that mis-operations recommendations need not be dealt with until North American Electric Reliability Corporation and Regional Entities deliberate over assignment of responsibility for this task.  The Commission accepted the findings in the Audit and required FRCC to do the following:

  • Provide to its RE function full information from the Member Services Division on each mis-operations report it receives and the Member Services Division response;
  • Design an implementation plan and submit that plan to OE staff for review and approval within 60 days of this order; and
  • Make non-public quarterly submissions to OE staff detailing progress in implementing the actions in the Report until all actions are complete.

A copy of the Commission’s order is available here.