On January 31, 2011 the North American Electric Reliability Corporation (“NERC”) filed its first Administrative Citation Notice of Penalty (“NOP”), at the Federal Energy Regulatory Commission (“FERC” or the “Commission”). In addition to the Administrative Citation NOP, NERC also filed 22 individual NOPs.
NERC Board of Trustees Compliance Committee approved the Administrative Citation NOP on January 10, 2011. In September 2010, the Commission accepted NERC’s three-year performance self-assessment, and recommended the development of procedures that eliminate the burden of processing more minor reliability standards violations separately. According to NERC, managing the violations using this “parking ticket” type administrative process will allow them to focus on more serious violations and speed up mandatory reliability standard enforcement.
The Administrative Citation NOP intends to resolve forty-one alleged violations of eleven reliability standards by nineteen registered entities, with fines totaling $91,800. The majority of the violations were of critical infrastructure protection (“CIP”) standards. All of the purported violations in the Administrative Citation had minimal impact on the bulk power system and none of the fines exceeded $5000. In addition, all jurisdictional entities agreed to the penalties, but they did not all admit to the violations.
The twenty-two individual penalty notices filed with FERC totaled $264,500. Notably, the largest penalty was a fine of $50,000 issued for an alleged violation of a reliability coordination standard (IRO-001) by the City of Austin d/b/a Austin Energy. The other significant individual penalties were for violations of a communications standard (COM-002), a facilities standard (FAC-008), and a protection systems standard (PRC-005).