In an order issued on Friday, the Federal Energy Regulatory Commission (FERC) approved a settlement filed by its Office of Enforcement (OE) and the North American Electric Reliability Corporation (NERC) under which the Florida Reliability Coordinating Council, Inc. (FRCC) will pay a $350,000 civil penalty and take other actions designed to improve reliability. The settlement resolves alleged violations by FRCC of NERC Reliability Standards in connection with the 2008 Florida Blackout. The order underscores the uncertainty surrounding the determination of penalties for violations of the Reliability Standards, but emphasizes the need for creative, proactive strategies to ensure compliance with the NERC requirements and thereby enhance reliability.

Background

The settlement stems from FRCC’s role in the February 26, 2008 blackout in peninsular Florida, which resulted in the loss of 3,650 MW of customer service (the Florida Blackout). The Florida Blackout originated as a fault caused by a Florida Power & Light Company (FPL) engineer at a substation on the FPL system that had a domino effect throughout southern Florida. Following an investigation of the blackout, OE and NERC found (among other things) that the acting Reliability Coordinator (RC) operator on duty at the time of the incident did not respond appropriately to the substation fault.