On January 25, 2011, the staff of the Office of Enforcement (“OE” or “Enforcement”) for FERC issued a Notice of Alleged Violations against the Grand River Dam Authority (“GRDA”) for multiple violations of mandatory reliability standards.  After a nonpublic preliminary investigation, Enforcement alleged that fifty-two requirements for nineteen reliability standards were violated from June 2007 to May 2010. 

GRDA is an Oklahoma based public power agency, and their facilities include hydroelectric and thermal generation facilities along with a transmission system.  GRDA operates in the Southwest Power Pool (“SPP”).  SPP has not issued any notice of violations against GRDA, and although FERC has designated the North American Electric Reliability Corporation (“NERC) as the certified Electric Reliability Organization (“ERO”), the Commission retained the authority to investigate alleged violations separately from ERO.  This case highlights the potential for disconnect between enforcement of mandatory Reliability Standards by OE and the ERO, where the two organizations may take different interpretations of Reliability Standards and reach different conclusions on violations.

GRDA’s case could be the first to fully litigate with Enforcement on reliability violations, and this may also be the first opportunity for FERC to apply new penalty guidelines for reliability standards violations (see September 17, 2010 edition of the WER).  While this may be the first case, it is unlikely to be the last, as several other joint OE/ERO investigations are also ongoing.

A copy of the Staff Notice of Alleged Violations is available at www.ferc.gov and here.