APS Agrees to Pay $3.25M Blackout Penalty
Arizona Public Service Co. (APS), the Federal Energy Regulatory Commission (FERC), and the North American Electric Reliability Corp. (NERC) reached a settlement on July 7 related to the Sept. 8, 2011 blackout that left more than 5 million people in the Southwest without power.
As a result of the agreement, APS will pay a $3.25 million civil penalty for violations of NERC Reliability Standards, although it does not admit to the violation as part of the settlement. The company will pay $2 million to the U.S. Treasury and NERC, and will be required to invest $1.25 million in reliability enhancement measures that go beyond the mitigation of the violations that are resolved in the settlement agreement.
The reliability enhancements include new Phasor Measurement Units, which provide continuous, high-speed monitoring of system conditions; funds to help APS’ neighbor Western Area Power Administration-Desert Southwest purchase a capacitor bank for supporting voltage in an area affected during the incident; and a new geo-spatial visualization tool to help system operators better understand potential reliability risks. In addition, APS is taking multiple steps to mitigate the Reliability Standards violations that were identified.
“APS’ reliability enhancements will improve the reliability of the Western Interconnection and are valued at substantially more than the $1.25 million credit granted,” Acting FERC Chairman Cheryl LaFleur said. “This settlement exemplifies how having FERC staff and NERC working together can improve the operation and reliability of the grid.”
According to a May 2012–issued FERC-NERC staff report, the 2011 blackout that left customers in parts of Southern California, Arizona, and Baja California, Mexico, without power for up to 12 hours, was caused when the system transitioned to an unsecured operating state due to inadequate planning, along with a lack of observability and awareness of system operating conditions.
The sequence of events leading to the blackout began when a utility worker conducting maintenance in the North Gila substation near Yuma caused the loss of APS’ Hassayampa-North Gila 500-kV transmission line. Moments later, one of three turbines generating power at a plant east of Mexicali shut down, creating an imbalance in the line running south from the San Onofre Nuclear Generating Station, which prompted both of its units to go offline. A multitude of other events on five different grids worsened the situation over an 11-minute stretch that culminated in the massive blackout.
The agreement marks the first settlement stemming from the FERC-NERC joint investigation into the outage. Additional non-public, preliminary investigations related to other entities involved in the September 2011 event are ongoing.
—Aaron Larson, associate editor (@AaronL_Power, @POWERmagazine)