On November 1, 2019 FERC approved a Stipulation and Consent Agreement between its Office of Enforcement (“OE”), the regional reliability entity Texas Reliability Entity, Inc. (“Texas RE”), the North American Electric Reliability Corporation (“NERC”), and Calpine Corporation (“Calpine”), related to Calpine’s alleged violations of NERC reliability standards governing maintenance and testing of batteries and other protection systems, as well as provisions of the California Independent System Operator Corporation (“CAISO”) Tariff requiring entities to report planned and unplanned generator outages. As part of the settlement, Calpine neither admitted nor denied the alleged violations, but agreed to pay civil penalties of $375,000 to Texas RE and $25,000 to the United States Treasury, and to undergo compliance monitoring.
According to the settlement, on February 6, 2015, a Calpine employee submitted an internal complaint alleging that the operations and maintenance manager for its Gilroy Energy Center, a 141 MW natural gas peaking facility in Gilroy California, failed to report certain of Gilroy’s outages, and that the manager ordered employees to falsify missing battery testing records. After receiving the complaint and conducting an internal investigation, Calpine reported to the Western Electric Coordinating Council: 1) two violations of the CAISO Tariff when Calpine failed to report Gilroy’s unavailability until CAISO called upon the unit to run; and 2) ten violations of NERC reliability standards related to the falsification of battery testing records. Calpine also notified FERC’s OE of these same violations. After broadening its internal investigation, Calpine later self-reported to Texas RE nearly 200 additional instances of NERC standards violations. In January 2016, NERC adjudicated and posted the violations without triggering an enforcement action.
FERC’s OE initiated its investigation into Calpine’s alleged violations in August 2016. Including the ten violations of NERC reliability standards that Calpine had previously reported at Gilroy Energy Center, OE concluded there were 215 instances in which Calpine failed to perform certain battery tests, failed to retain records, or falsified testing records from 2012 to 2015. OE concluded that the instances of falsified recordkeeping were the result of individual circumstances at each plant, rather than centrally directed by Calpine itself. OE did not find any additional violations of CAISO’s outage reporting requirements.
In addition to paying $400,000 in total civil penalties, the Stipulation and Consent Agreement requires Calpine to follow a mitigation plan aimed at preventing future violations, and to submit annual compliance monitoring reports for two or three years, at OE’s discretion.
FERC’s November 1 Order is available here.